Hermes Plans to Raise Prices 5-10%

The luxury handbag market continues to defy inflation, the stock market, and basically everything else.

Despite inflation, threat of recession, and other economic warning signs, the demand for Hermes handbags continues to soar. On Thursday, October 20, the French fashion house announced plans to increases its prices by an eye-popping 5-10% after reporting sales that exceeded expectations.

This comes on the heels of a 4% price increase so far this year. The standard price increase is closer to 1.5-2% annually, just as a reference point.

So, just how well is Hermes doing? Sales rose 24% (equal to $3.07 billion) from July 2022-Sept 2022 compared to those same three months in 2021. That’s with one of the smallest ad budgets in the industry — Hermes spends just 5% of its sales on marketing efforts, most of which goes toward live events vs. proper ad campaigns.

Louis Vuitton also reported that its sales had risen sharply, and Kering SA, which owns Gucci among other luxury fashion brands, posted a higher-than-expected rise in sales. Some of this added oomph reportedly came from U.S. tourists spending up a storm in European capitals when the Euro and Dollar became equals (effectively creating a discount on many handbags before prices were adjusted).

This all just serves as a reminder, that luxury handbags are legitimate investments and should be treated as such. Also, if you’re in the market for a Hermes Birkin or Hermes Kelly, carpe diem!