Luxury brand Hermès reports sales growth of 26%: where luxury is most loved

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    Luxury brand Hermès reported a 26% increase in sales: where luxury is most loved

    Despite an average price increase of 3.5%-4 %, buyers line up for brand new products. Watches and ready-to-wear are particularly successful.

    French luxury brand Hermès increased its sales by 26% in the second quarter of 2022 to reach 2.7 billion euros while achieving a record operating profitability in the first half, exceeding 42% of revenue for the first time, according to WWD.

    This success was supported by strong growth in retail sales, including the opening of new stores in the US and China, as well as the return of tourists to Europe, despite rising prices due to inflationary pressures.

    “Due to excellent sales dynamics, the group achieved exceptional results,” said Axel Dumas, CEO of Hermès International.

    In the US, Hermès sales increased by 34%, opening a new boutique in Austin in April and holding an exhibition in Detroit in June. In France, sales increased by 41% and across the continent by 34%. Hermès was especially well bought in the UK and Italy. Sales are also recovering in China, which survived the coronavirus pandemic. Particularly joyful for the brand, growth dynamics is demonstrated in Beijing and Shanghai. Hermès also opened its first boutique in Zhengzhou.

    The results showed the brand is likely to be “the most resilient luxury player in the recession” as it far outperformed market forecasts, said Bernstein analyst Luca Solca. in a research note.

    Watches were the largest customer purchases, with sales up 59%, driven by the launch of two new Heure H and Cape Cod watches.

    Ready-to-wear sales brought Hermès growth by 36%. The brand's accessories and footwear sold well.

    The brand continues to expect strong demand for its products, even as the supply chain and inflationary pressures pushed prices up 3.5 percent earlier this year . From July 1, prices will rise by 4%, as jewelry and watches have risen in price. The reason is the rise in prices for gold and other metals.

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