Luxury bag maker Hermes sees no sales slowdown  

A model wears a creation for the Hermes ready-to-wear Spring/Summer 2023 fashion collection presented in Paris, France.

Birkin bag maker Hermes flagged plans to hike prices by 5% to 10% in 2023 on rising costs and currency fluctuations, much more than in the past, after a sharp rise in sales over the third quarter with no signs of any slowdown yet.

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 US shoppers took advantage of the dollar's strength in Europe and China rebounded sharply.

"We will probably have price hikes between 5 %and 10%," Hermes executive vice president of finance Eric du Halgouet told reporters, blaming increased costs and currency movements.

The company had so far been more conservative than peers, which have aggressively raised prices during the pandemic.

Hermes, which has waiting lists for its prized $10,000-plus handbags and limits production to maintain exclusivity, increased prices by around 4% this year and by 1.5% to 2% on average in previous years. That compares with double-digit price hikes at Chanel.

In another sign of confidence Hermes said it would accelerate a hiring drive in the second half, after adding 800 people in the first six months and increasing salaries for all European employees in July.

Sales for the three months ending in September came to €3.14bn, 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, with China in particular rebounding strongly.

 Reuters