Hermès enjoying healthy sales as compared with other luxury brands

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  1. France's Hermès says not feeling any slowdown

    PARIS (Reuters) - Hermes (HRMS.PA) enjoyed healthy sales growth in the summer and September, contrasting with other luxury brands such as Burberry (BRBY.L) and Tiffany & Co (TIF.N) which have warned of deteriorating trading conditions.

    An image from the SS 2013 runway

    The upbeat trading update on Sunday is likely to cement the view that the global luxury market is becoming increasingly segmented with some brands such as Hermes, Prada, Dior, Balenciaga feeling no pain while others, more vulnerable, are starting to suffer.

    "We have not seen any inflexion of any kind in our sales," Hermes Chief Executive Patrick Thomas told Reuters after the brand's presentation of its next spring/summer collection.

    "Therefore our targets for the year remain unchanged."

    Hermes is known for its 15,000 euro (11,930 pounds) Kelly and Birkin leather bags and its 400-euro silk scarves.

    Dior Chief Executive Sidney Toledano on Friday said sales trends remained positive.

    Many luxury brands, such as Tiffany and Burberry, blame an economic slowdown in China and Beijing's crackdown on gift-giving for their souring fortunes after having heavily invested opening flagship stores there.

    Chinese customers, at home and abroad, are the biggest buyers for many well-established luxury brands such as Gucci (PRTP.PA) and Louis Vuitton (LVMH.PA).

    But luxury analysts also noticed changes in luxury spending patterns which show a rise in purchases of discreet, connoisseur luxury products and a drop in money spent on flashy, logo-embossed items.

    "Chinese customers are becoming increasingly sophisticated very fast," Thomas said.

    "Before, they wanted ostentatious items, now they want quality objects. The future of the luxury market lies in products which demonstrate genuine craftsmanship."

    Thomas was speaking after the brand's fashion show held in the Jeu de Paume museum in central Paris.

    Ex-Lacoste designer Christophe Lemaire, presented his fourth ready-to-wear collection for Hermes, which featured simple, minimalist ample white tunics, draped exotic printed silk suits and safari-inspired beige and ochre raincoats and jackets.

    The collection seemed this year more eclectic than in the past, critics said, with oversized jackets on extra small shorts, and leather dresses in bright colours such as royal blue or emerald green which paid tribute to the brand's tradition of leather craftsmanship.
  2. I appreciate they pay tribute to leather craftmanship in RTW. It's true the wealthy Chinese in China are looking for less ostentatious items. What they are exactly looking for are still the classic Bs, Ks with a few who may buy Illico and Sac Roulis. That's what exactly they are looking for. Few of them can appreciate Hermes Spring 2013 RTW.

    It's high time for Hermes to stop thinking about the Chinese market in China. They should look into a world approach. Frankly, the biggest buyers for Hermes are not exactly the Chinese in China.:yes:
  3. I guess it is not that surprising considering a lot of H stores have no stock of anything. Glad to hear that people appreciate great quality.
  4. For the second time today you have hit the nail on the head IFFAH.

    Just because Hermes fiscal policies look like they are paying off now, doesn't mean that trouble does not lie ahead. Expansion has come at a price and somethings cannot be measured on the bottom line immediately.

    Burberry's capital investment was a huge (more pushes to the East and huge outlay on technology) and therefore noticeable deficits were expected.
  5. Does not compute; does not compute. H stock is down -- I mean investment stock.

    In sum, do not believe everything you read.

  6. Agreed. You are spot on. I wish H would pay attention to the rest of the world as well. There are people in other parts of the world waiting for their birkins as well who appreciate the brand and the craftsmanship. There are many people here who arent after just the IT bag.
  7. H does need to pay attention to other markets that were not only supportive
    but also were loyal..

    And just because things look good now, there is always tomorrow...
  8. hmmm all i can say is good for H ! in all honesty im not surprised .that said they could be a bit more careful as to who and how they distribute the big money makers Bs and Ks simply because the reseller market in asia and around the globe is becoming excessive and frankly unfair to many true costumers !!

  9. :flowers: papertiger and ilovenicebags.:flowers:

    Btw, I am of Chinese origin too and have friends from mainland China in case if any gets offended by my comment
  10. #10 Oct 2, 2012
    Last edited: Oct 2, 2012
    So true, that's why there is always a long Q outside Hermes in HKG:biggrin:. Maybe looking for Bs or Ks.