Hermes to Boost Prices Amid Continued Luxury Resilience

Luxury brand Hermes said it plans to raise prices next year, after reporting what it called “very good sales momentum” Thursday (Oct. 20) and continued buying power among affluent consumers in the face of rampant inflation.

Hermes Executive Vice President of Finance Eric du Halgouet said the company would likely increase prices between 5% and 10%, according to published reports. He cited rising costs and currency fluctuations as the reasons for the price increases.

According to the French company’s third-quarter earnings report, Hermes enjoyed a 24% increase in revenue for the quarter.

The 185-year-old retailer reported a strong increase in sales in China, despite pandemic-related closures. Sales were up 28% in the United States, following the opening of new stores in Austin and on Madison Avenue in New York, the report stated.

Hermes also saw increased sales in Europe — 25% in all of Europe excluding France, 28% in France — as the company “benefitted from the recovery in tourist flows, especially in France, the United Kingdom and Italy,” according to the report

“For the moment, we don’t see any sign of slowdown in any of our markets,” said du Halgouet.

The news follows last week’s earnings report by another luxury brand — Louis Vuitton-owner LVHM — which showed 19% sales growth for the quarter, and a 28% gain year to date, due in part to American tourists visiting Europe, armed with the historically strong U.S. dollar.

Read more: LVMH’s Unstoppable Luxury Train Detours to the TikTok Masses

“Against an uncertain geopolitical and economic backdrop, [LVMH] Group is confident in the continuation of current growth and will maintain a policy of cost control and selective investment,” the Paris company said.

While luxury retail has continued to perform well in the face of this year’s record inflation, PYMNTS noted last week that a possible recession is another matter. High earners who often have equally high stock holdings have begun to get nervous as the value of their investments declines, inevitably leading them to tighten their belts.

See more: The ‘Wealth Effect’ Takes a Hit as Highest Earners Start Fearing Recession

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