Sales of Hermès luxury purses, which can cost more than $25,000, rose more than 11% in the most recent quarter — the latest evidence that well-heeled buyers can’t get enough of its expensive goods.
The French-based manufacturer of the ultra-exclusive “King of Bags” – Birkin, A favorite of celebrities like Jennifer Lopez And Kim Kardashian – Reported revenue of $3.99 billion for the three months ended at the end of September.
That’s despite the sector-wide recession hitting luxury labels across the industry, including Louis Vuitton parent LVMH, headed by billionaire Bernard Arnault, and Gucci parent Kering.
Strict inventory management and production control on Hermès’ classic designs, including popular purses such as Kelly and Constance, has helped cement the label’s aura of exclusivity and made the company one of the most consistent and profitable in the industry.
Hermès shares have risen nearly 9% since the beginning of the year, LVMH has fallen nearly 15%, Moncler has fallen 3.3% and Kering, which is working to turn around Gucci , has declined by 40%.
Last week, LVMH fell short of analyst estimates and followed a decline in Chinese consumer confidence to a COVID-era low, with fashion demand falling during the quarter.
Kering warned that its 2024 operating income would nearly halve to its lowest in years as weak demand in China deepens Gucci’s struggles.
Meanwhile, Hermès bags are in such demand that buyers in the US have sued the company Because it reportedly forces buyers to spend thousands on other products before being given the opportunity to purchase the highly coveted, handmade Birkin bag.
Earlier this month, lawyers representing the French company asked a federal court in San Francisco to dismiss a lawsuit that claims Hermès only allows customers with “substantial purchase history” to buy Birkin bags. Gives a chance.
Consumers argue that Hermès is violating antitrust law by linking the purchase of other products to the ability to purchase a Birkin bag. Claims of false advertising and fraud were added to the amended lawsuit.
According to the lawsuit, Hermès and its sales staff “knew that many of the people they induced to purchase accessory products would not actually receive a Birkin bag.”
Hermès denied any wrongdoing, telling US District Judge James Donato that the claims were “far-fetched” and that the company faced intense market competition.
Donato, a former antitrust lawyer before taking the bench in 2014, was skeptical of consumers’ claims during a hearing in September.
“Hermès can run its business any way it wants. If he chooses to make five Birkin bags a year and charge a million for them, he can do that,” Donato said.
He added: “The fact that many of your customers may not be able to obtain Birkin bags is not an Hermès antitrust problem.”
The judge suggested that Hermes’ alleged conduct could also increase competition, inducing shoppers to purchase a rival’s bag to avoid the need to purchase additional Hermes goods.
“If Hermès is going to charge you big bucks for your bags, they’re leaving the field open for every competitor to say, ‘Come in and have our beautiful bag and you have to buy $3,000 or $30,000 worth of belts. No need said Donato.
with post wires
