While many luxury brands have experienced a downturn, Hermès has managed to come out on top.
The Parisian company, which offers some of the world’s most coveted designer products, saw sales rise 11.3 percent in the third quarter, according to its latest earnings report. During the same period, the brand generated revenues of $3.99 billion (€3.7 billion). This is a staggering amount at any time, but it is even more so as the luxury sector is hit by a global recession due to declining sales from Chinese shoppers and market fatigue. Masu. , and prices have increased significantly, Reuters reported.
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Demand for Hermès leather goods, such as the famous Birkin and Kelly handbags, has only increased by 17% in this sector. As for ready-to-wear and accessories, the house recorded a 15% increase in the third quarter, with perfume and beauty products also increasing by 7%. The company has also responded to shoppers’ growing interest with additional investments in its supply chain, including training 250 new artisans and opening a 23rd workshop dedicated to making leather goods.
Meanwhile, Hermès’ biggest competitors in the luxury sector, LVMH and Kering, both missed analyst estimates in the third quarter. Kering has introduced several cost-cutting measures in response to an expected 50% decline in annual operating revenue, but this is a sign of the recent lackluster performance at Gucci, the most important member of its portfolio. It is also associated with a lack of performance. Less dramatically, LVMH, which previously tried to buy Hermès, saw its fashion and leather goods sales fall 5% last quarter, after initially expected to rise 4%.
However, despite its strong performance, Hermès is not immune to the current downturn in the luxury goods market. In July, store traffic in China from the aspirational customer, who often buys the brand’s more affordable silk scarves and other small accessories, fell slightly, Reuters reported.
Only time will tell how this house, and the rest of the luxury industry, fares in the fourth quarter.
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