Is the Birkin the only product that Hermès really needs? The iconic bag helped the brand outperform LVMH and Kering in early 2021 ... but now it’s getting into cosmetics with Hermès Beauty

Jul 27 , 2021

Hermès Beauty, part of the group’s strategy to diversify despite the continued success of the classic Birkin handbag. Photo: @hermès/Instagram

Unlike Gucci and Louis Vuitton, Hermès doesn’t use KOLs and C-stars like Xiao Zhan in China but has got into make-up, taking on Estée Lauder, L’Oréal and Chanel

Baghunter says Birkin bags are a better investment than gold or stock but Axel Dumas, CEO of Hermès Group, aims to add more balance to the product range

Hermès is on a roll. First it was their popular “Wanderland” exhibition in Shanghai, then it was the opening of Hermès Fit, a pop-up in Chengdu offering free gym classes, and now it’s experimenting with “mushroom” leather, a sustainable alternative to leather.

The Birkin bag. Photo: @hermès/Instagram

Then there’s the classic Birkin bag. Over the past three decades, the value of this iconic bag has increased by an average of 14 per cent year-on-year (YOY), resulting in Baghunter, an online retailer for luxury handbags, observing in 2016 that Birkin bags make for a better investment than gold or stock.

Hermès Beauty unveiled its first make-up collection in early March 2020, starting with a line of lipsticks. Photo: Hermès

Most recently, the heritage house turned to the lucrative cosmetics field, launching an exclusive Hermès lipstick collection last year followed by the release of their Rose Hermès blush collection in April 2021.

Given their latest first quarter earnings report, consumers clearly are still very much enamoured with the brand, which saw a 44 per cent increase YOY. Watches, homeware, fine jewellery, ready-to-wear and accessories all contributed to this impressive growth over a period in which they nearly doubled their sales. Yep, things are looking very good at Hermès.

At the 2019 shareholders meeting, Axel Dumas, CEO of Hermès Group, stated that their goal is to become a comprehensive global luxury goods group, so the balanced development of various departments must surely be pleasing. And the proof is in the pudding, as the 184-year-old house outperformed fellow luxury conglomerates LVMH and Kering in the first quarter of 2021.

Here, we examine how Hermès has stayed relevant over the years and whether venturing into new categories will see it keep its position in the market.

Hermès doesn’t need celebrities ... or does it?