Hermès bags will cost more in 2023, so buy that Birkin now: in January, prices will rise by up to 10 per cent, French luxury-goods company says
- Hermès plans to increase prices worldwide by between five per cent and 10 per cent in January. A Birkin bag in France, now US$7,200, will cost nearly US$8,000
- Despite the cost-of-living crunch, wealthy shoppers are still splashing out on luxury goods. Owning an Hermès bag is seen ‘as an investment’, says one analyst
A Birkin bag will cost much more next year, Hermès said as it provided further signs of the luxury-goods industry’s relative immunity from the cost-of-living crunch.
“Perception of ownership of Hermès as an investment, and as a sign of prosperity, is building,” said Deborah Aitken, analyst at Bloomberg Intelligence, which gives the company “added flexibility” when it comes to pricing.
Hermès is maintaining its pricing power because wealthy shoppers are still splashing out on luxury goods, even as household budgets are squeezed by higher energy costs and inflation. The company said that revenue rose 24 per cent to €3.1 billion in the third quarter, excluding currency swings.
The gain was well above analysts’ estimates, and shares of Hermès gained as much as 4.3 per cent in Paris.
“For the time being, we have no signs of slowdown in any of our markets,” Du Halgouët said. Hermès plans to hire another 800 workers in the second half, roughly the same number as in the first half, a spokeswoman said.
The chief financial officer said the increases are justified thanks to higher wage and input costs in Europe. Price rises in Japan, following the yen’s depreciation, are likely to be higher than in the US, where the dollar is strong, he added.
Hermès had an “excellent” third quarter in China despite some Covid-19 lockdowns there, Du Halgouët said.
Hermès is considered one of the most exclusive brands in the luxury sector, with production of its bags capped by capacity constraints. Sotheby’s last month sold its most expensive handbag ever, a crocodile-skin Hermès Kelly, for €352,800 at an auction in Paris.
