Hermès is known to be one of the most resilient — if not the most resilient — luxury houses out there, posting consistent sales results while competitors struggle. And it proved itself as such once again in the third quarter of the year, reporting a 10 percent lift in revenue at current exchange rates to €1.26 billion (about $1.4 billion) on Thursday.
It's a sharp increase from the first and second quarters, in which sales increased 6 percent and 8 percent, respectively. (Which, granted, still isn't bad.) Hermès said at the end of 2015 that the devastating Paris attacks last year put a significant damper on its sales in the European region — sales of scarves, a common tourist purchase, were hit particularly hard.
Now as the brand heads into the final stretch of 2016, it may still be feeling some of that: Sales of silk and textiles were down 6 percent in the three months ending Sept. 30. But handbag sales more than made up for that: They were up a whopping 16 percent thanks to the enduring appeal of the Birkin and Kelly styles, as well as the success of three newer bags: Constance, Halzan and Lindy. Demand was supported by new production sites in Charente, Isère and Franche-Comté. Also, sales were steady in Europe — up 7 percent — particularly in the brand's own stores, which the brand says, "confirm their resistance, despite the impact of recent events, particularly in France."
Handbag sales also made up for, as usual, unremarkable sales in ready-to-wear and accessories, which saw a 1 percent decline. Perfumes and watches were up 6 percent and 1 percent, respectively.
"Many of the psychological catalysts, which dampened luxury demand – starting with the renminbi deterioration in August 2015 and including attacks in Paris in November 2015 – have now been shrugged off," HSBC's Erwan Rambourg said in a report cited by WWD on Thursday. Similarly, analysts have said that the U.S. election has also negatively impacted the luxury market with shoppers seemingly hesitant to spend on expensive, superfluous items due to uncertainty around monetary policy.
Hopefully, soon, this nightmare will be over for all of us.