What's happened
Hermès reported a 14% revenue increase for the first nine months of 2024, contrasting sharply with declines at competitors like LVMH and Kering. The brand's exclusivity strategy and tight inventory management have bolstered its performance, even as it faces a lawsuit over alleged antitrust violations related to its Birkin bag sales.
Why it matters
What the papers say
According to the New York Post, Hermès reported $3.99 billion in revenue for the third quarter, defying the broader luxury market slump affecting brands like LVMH and Kering. Business Insider UK highlighted Hermès's 14% revenue growth, contrasting sharply with Kering's 25% drop in Gucci's sales. Bloomberg noted that Hermès's sales increased 11.3% at constant exchange rates, further emphasizing its resilience. The legal challenges faced by Hermès, as reported by the New York Post, could impact its sales strategy, but initial court reactions suggest a favorable outlook for the brand. This juxtaposition of strong financial performance against legal scrutiny illustrates the complexities within the luxury market.
How we got here
The luxury market has faced significant challenges in 2024, particularly in Asia, where demand has weakened. Brands like LVMH and Kering have reported substantial revenue declines, prompting concerns about the sector's future. Hermès, however, has maintained strong sales through its unique business model focused on scarcity and exclusivity.
More on these topics
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LVMH Moët Hennessy – Louis Vuitton SE, also known as LVMH, is a French multinational corporation and conglomerate specializing in luxury goods, headquartered in Paris, France.
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Gucci is an luxury brand of fashion house based in Florence, Italy. Its product lines include handbags, ready-to-wear, shoes and accessories, makeup, fragrances, and home decoration.
Gucci was founded by Guccio Gucci in Florence, Tuscany, in 1921.
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Hermès International S.A., or simply Hermès, is a French high fashion luxury goods manufacturer established in 1837. It specializes in leather, lifestyle accessories, home furnishings, perfumery, jewellery, watches and ready-to-wear.
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China, officially the People's Republic of China, is a country in East Asia. It is the world's most populous country, with a population of around 1.4 billion in 2019.