- Renowned luxury brand Hermès has experienced a slowdown in growth during Q3 2023, but still managed to outpace its competitors in the industry.
- While other brands are facing challenges due to economic uncertainties and reduced spending by aspirational customers, Hermès is confident in its ability to navigate these obstacles.
- Wealthy individuals should use safe modes of money transfer when making payments for luxury items.
Despite the overall global luxury slowdown, luxury brand Hermès has reported a 16% increase in sales worldwide.
Following the release of its results, Eric du Halgouët, the firm’s Finance Executive Vice President, emphasised that Hermès is less exposed to geopolitical uncertainties due to its values-driven approach and loyal customer base, which provide stability and resilience.
As demand remains strong, the brand continues to boast an increase in sales in the Chinese market, largely due to an increase in production in textiles, watches and leather goods, which attract high net-worth buyers.
Hermès’ Executive Chairman Axel Dumas attributes the company’s solid performance to the global desirability of its collections, as well as the sustained momentum in the Asian and American markets.
Hermès’ success can be attributed to its focus on high-end customers, who tend to be more resilient during economic downturns. This contrasts with the performance of rival brand LVMH Moët Hennessy Louis Vuitton, which saw just a 1% increase in revenue during the same period.
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Hermès has announced its commitment to further investing in the Chinese market regardless of challenges such as high youth unemployment and a looming real estate crisis.
The company remains optimistic about the long-term potential for growth in China – it plans to open a new store in Tianjin in July and has a second store scheduled for Chengdu before the end of 2023, both stocking luxury collectable items.
With sales in Japan up 24.1% and the Americas experiencing a 20.4% increase, Hermès sees continued investment in China as a crucial part of its growth strategy.
Categories such as watches, leather goods, textiles, home goods and fragrances have seen a large growth in popularity from affluent European buyers.
The popularity of Hermès’ handbags has also led to the development of new leather workshops in France to keep up with the demand. Hermès is also set to increase its marketing spend in Q4 with a series of events taking place worldwide.
While the brand’s brick-and-mortar stores continue to be its main attraction, it is also committed to investing in omnichannel development.
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