Axel Dumas is serene. At the shareholders’ meeting (Paris, 30 April), the CEO of Hermès ranged over the market scenario. Three hundred and sixty degrees: from polarisation to the importance of size, from the slowdown in the group’s growth to confidence in China. Despite the context that is critical for many, he boasts of the certainty of the brand he heads.
Why Dumas is serene
That the luxury market is going through a period of change was also confirmed by Dumas: “People no longer buy luxury goods according to their income, but according to their wealth”. The CEO of Hermès warned that the “crisis in the real estate sector” will have a greater impact on spending than the slowdown in economic growth. But he also described the increased polarisation of luxury. At the beginning of his tenure (June 2013) only a few percentage points separated the strongest from the weakest players. Today, the best could record annual gains of 20% and the worst slip 20%, as WWD reports. Which is a bit like what happened in the first quarter of 2024 between Hermès itself and Gucci, for example.
Size matters
Dumas also emphasised the advantages of having a certain size. Which are? You can invest a lot in production, distribution and communication. And thus gain a larger share of consumers and the market. Hermès’ revenues have almost tripled in the last ten years. The share price has risen tenfold to EUR 2,300 on 30 April. Some have speculated about a share split to facilitate the entry of new private investors. But Eric de Seynes, chairman of the supervisory board, disagrees and replied that this possibility is not on the table for the time being, as Les Echos reports.
Moderate growth
Dumas, 53, representing the sixth generation of the founding family, also pointed to moderate growth. It was 20.6% in 2023, compared to 23.4% in 2022 and 41.8% in 2021. And he attributed this decline to “the exhaustion of the post-pandemic euphoria”. But commenting on the Asian market, the same manager said: “I think there is a very strong dynamic in Asia, with a growing middle class. I am quite optimistic about the future growth of our industry”.
In photo, from hermes.com, the illustration created for the brand by Stuart Patience
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