Is Hermes losing ground?

Hermès sales reached 5.5 billion euros for 2017 as a whole, up 9 percent year-on-year, while fourth-quarter revenues were down 0.4 percent to 1.5 billion euros. Hermès reported a slowdown in sales growth in the fourth quarter as stocks of its coveted handmade bags ran low.

“There is good momentum in our industry because of demographics and because of the economic growth of China and the worldwide economy,” said chief executive Axel Dumas. Hermès said operating profitability should be close to the level recorded over the first half of last year, when it hit a record 34 percent.

Gucci has recently overtaken Hermès becoming the second largest luxury brand in the world after Louis Vuitton. Hermès’ potentially engineered low inventories could actually turn against the brand. Waiting lists for the famous Birkin handbag have reached 3 years at most global flagship stores. But does this scarcity actually continue to translate into desirability? Are today’s consumers ready to wait 3 years for a Birkin bag when they can get a similar quality handbag at Moynat, Goyard or Delvaux at much more competitive prices?

We shall be updating the article according to feedback from our readers.

HERMES Birkin 30 Crocodile