Hermès, maker of Birkin and Kelly bags, sees 21% sales growth in 2023

But one company has managed to defy a perceived slowdown in the luxury industry, as shoppers appeared to finally succumb to inflationary pressures after they spurred rapid growth during COVID-19 lockdowns. 

Paris-based Hermès, which sells its high-end bags and accessories into a broad global market, was the rare outlier when it beat analyst expectations in the third quarter of 2023 while its rivals were reeling from easing spending. 

It continued to see strong demand towards the end of 2023, with sales surging 18% to €3.36 billion ($3.62 billion) in the last three months of the year in constant exchange rate terms, Hermès said in its earnings report Friday. The group’s full-year revenue was up 21% compared to 2022.

“These solid results reflect the strong desirability of our collections and the commitment and talent of the house’s women and men,” the company’s executive chairman Axel Dumas said in a statement. 

All of Hermès’s key segments—from leather goods to silk and textiles—grew over 10% in the fourth quarter. The brand also recorded strong performances in regions like America that have been pain-points for other luxury players.

Seeing as consumers continue to opt for Hermès’s luxury goods despite a cost-of-living crunch, the brand is looking to press on with price increases of 8% to 9% globally in the current year, Dumas told reporters, according to Reuters. 

The maker of Birkin and Kelly bags has resorted to price increases for several years now—even before 2023 kicked off, Hermès’s CFO Eric du Halgouet announced an increase in prices by 5-10% as a way to hold on to pricing power amid consumers’ unyielding appetite for its luxury goods. Other…