Despite the economic downturn, the luxury sector continued to be robust, and demand for high-end designer products remained brisk.
After Covid, Hermès topped €200 billion in market value, replacing out Swiss drugmaker Novartis to become the second-most valuable luxury brand after industry leader LVMH.
Hermès has increased its revenue by 30% in the previous three months since the beginning of 2023. In its full-year financial results for 2022, the company’s combined revenue was €11.6 billion, a 29% increase over 2021.
According to Bloomberg, the brand is currently worth more than the total value of French corporations such as Carrefour, Societe Generale, Orange, Renault, and Airbus.
Moreover, the reopening of the China market and the return of overseas travel contribute to that leap.
When restrictions on Covid-19 were lifted in select Chinese cities last summer, there was a boom in demand inside the country. Furthermore, the return of rich American visitors to Europe, aided by a favorable exchange rate, has led to improved sales in important luxury markets like as France, Italy, and the United Kingdom.
Hermès handbags are constantly in high demand despite its high starting price and some rarer models can even hit hundreds of thousands. Even then, the demand for its Birkins and Kellys have far outpaced supply. Additionally, because of the exclusivity, many Hermès bags retain their value well in the resale market where it is possible to find bags in the millions.
The brand has forged a reputation as being one of the most exclusive brands in the world of luxury, and its waitlist for Birkins could go up to years. Globally, there are around 300 stores worldwide, which is about the same number a decade ago, but sales have more than doubled in the same period. With increasing sales, one would expect the company to improve its supplies, but under the Dumas family, the controlling stakeholder of Hermès, it has adopted “a conservative approach to managing growth”, as mentioned in an article by Forbes
