Hermès Sales Up 19%; So What Does the Future Hold?

The future is looking bright for luxury brand, Hermès. Today the French company reported a 19% increase in first quarter sales, noting a high demand for leather goods, as well as solid orders for perfumes and timepieces.

Some analysts credit the success of Hermès to the fact that the centuries old brand is still owned by the founding family—73% of the company, in fact. But another group opines that the demand for timeless leather goods has helped keep the label afloat. They recently lifted the renowned “wait list” for the Hermès Birkin Bag, fueling speculation that customers have jolted sales by splurging on their own. After all the Birkin is one of the most desirable and inaccessible handbags, well, ever.

But then there are also the watch and perfume portions of the company. With their luxury fragrances selling from $90 to $125 it seems likely that many consumers would indulge—if only to have their own small slice of the luxury brand. And the timepieces, while not exactly inexpensive, are much more affordable than their opulent leather goods. An average Hermès watch retails for around $2,000 to $4,000. Overall the brand has reported that sales in each of these categories have gone up about 38% to 39%.

Surprisingly, though, company executives are not betting on the future. Says Deputy Financial Director Lionel Martin-Guinard, “We prefer to remain prudent…we think the economic environment is still very uncertain.”

Either way, as more and more consumers are sticking to the basics (and that does not necessarily mean mass market, low luxury products), the sale of an extra Birkin or two isn’t surprising. After over a year of a fledgling retail business, companies are noticing an uptick in sales of timeless goods. So, lets hear it from you. Will you spoil yourself with a trip to Hermès?

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