PARIS (Reuters) – Birkin bag maker Hermes said it would likely hike prices by 5% to 10% in 2023, much more than in the past, after reporting a sharp rise in sales growth over the third quarter and seeing no signs of slowdown in any of its markets.
Echoing upbeat comments earlier this month by rival Louis Vuitton owner LVMH, Hermes brushed off concerns that the industry’s post-pandemic boom could be cooling due to a looming recession, as U.S. shoppers took advantage of the dollar’s strength in Europe and China rebounded sharply.
“We will probably have price hikes between 5 and 10 percent,” Hermes executive vice president of finance Eric du Halgouet told reporters on Thursday, adding this was due to rising labour costs and currency fluctuations.
The company raised prices by around 4% this year and by 1.5-2% on average in previous years.
Sales for the three months ending in September came to 3.14 billion euros ($3.07 billion), up 24.3% at constant exchange rates, double analyst expectations for 12% growth according to a consensus cited by UBS.
In Asia, excluding Japan, revenues grew by 34% over the period.
“Sales in Greater China picked up strongly, despite temporary closures due to sanitary measures mainly in Macau, Chengdu and Dalian in July and August,” the company said in a statement.
($1 = 1.0222 euros)
(Reporting by Mimosa Spencer, editing by Silvia Aloisi)
