Archive · 16 Jun 2025
Hermès Thrives in Luxury Slump, Defying Industry Downturn
Imagine a world where fancy, expensive bags are the hottest thing.
But, many companies that sell these goods are struggling because people aren't buying as much due to economic problems.
However, one company, Hermès, is doing really well.
They make their goods in small workshops and control how many they produce.
They also increase prices slowly.
They also sell cheaper items like lipstick, so that people may later buy a Birkin bag.
It's like they've found a secret recipe to keep doing well when other companies are struggling!
Hermès saw a 15% sales surge in 2024, reaching €15.2bn, despite a luxury market downturn.
Hermès' success is attributed to controlling supply chains, with a focus on in-house production and exclusive partnerships.
The company strategically manages price increases, aligning them with production costs and currency fluctuations.
Hermès offers both high-end and more affordable products, such as cosmetics, to maintain brand appeal.
Unlike some competitors, Hermès has maintained exclusivity by limiting production and retail locations.
- Who
- Hermès, along with competitors like Gucci and Louis Vuitton, and their customers.
- What
- Hermès defied the luxury slump with surging sales, while competitors struggle.
- When
- 2024 was the year Hermès's strong performance was evident.
- Where
- The article discusses the global luxury market.
- Why
- Hermès' success is attributed to their business model of controlling supply, disciplined pricing, and maintaining brand image.
- 2024 Sales
- €15.2bn
- Hermès Production
- 55% in-house or exclusive partnerships
- Birkin Bag Price Increase (since 2016)
- 29% to $12,100
- Hermès Price Increase (per year)
- 6-7%
- Hermès Shops Worldwide
- Fewer than 300