Hermes eyes big price rises, says no sign of slowdown

PARIS : Birkin bag maker Hermes said it would likely hike prices by 5 per cent to 10 per cent in 2023, much more than in the past, after reporting a sharp rise in sales growth over the third quarter and seeing no signs of slowdown in any of its markets.

Echoing upbeat comments earlier this month by rival Louis Vuitton owner LVMH, Hermes brushed off concerns that the industry’s post-pandemic boom could be cooling due to a looming recession, as U.S. shoppers took advantage of the dollar’s strength in Europe and China rebounded sharply.

“We will probably have price hikes between 5 and 10 per cent,” Hermes executive vice president of finance Eric du Halgouet told reporters on Thursday, adding this was due to rising labour costs and currency fluctuations.

The company raised prices by around 4 per cent this year and by 1.5-2 per cent on average in previous years.

Sales for the three months ending in September came to 3.14 billion euros ($3.07 billion), up 24.3 per cent at constant exchange rates, double analyst expectations for 12 per cent growth according to a consensus cited by UBS.

In Asia, excluding Japan, revenues grew by 34 per cent over the period.

“Sales in Greater China picked up strongly, despite temporary closures due to sanitary measures mainly in Macau, Chengdu and Dalian in July and August,” the company said in a statement.

($1 = 1.0222 euros)

 

 

Source: Reuters