The last quarter of 2024 will be positive and so, therefore, will be the financial statement 2024. In the medium term, too, Bernstein’s analysts expect Hermès to continue to grow: unlike in the recent past, however, it will do so by virtue of a somewhat more shameless strategy on prices. “Hermès has been among the most price-conscious companies during the post-Covid luxury boom”, writes the team of analysts led by Luca Solca, “which leaves it with the most significant room for manoeuvre in the sector”.
If Hermès continues to grow
Hermès’ strategy of producing less than it could sell makes it a very strong brand, and a guarantee on the stock markets as well, Bernstein’s analysts acknowledge. But in view of what is happening in the sector, they wonder what to expect in the short to medium term, “in view of an imminent cyclical recovery”. The outlook is optimistic, we said, but by virtue of the price adjustments: “The growth of the top line of Hermès will be supported by prices: the brand is using its pricing potential both to increase prices in Europe and to re-establish the gaps with foreign markets. In particular, in Japan and China, where the weakness of the exchange rate has eroded the usual premiums”.
The room for manoeuvre
Thanks to the collaboration with databoutique.com, Bernstein expects Hermès to raise prices by around 7%, more than many competitors will do. But it remains true that the brand is starting from different premises. Looking at the changes in France between 2020 and 2023, Chanel has increased its prices by 59%, Prada by 52%, Dior by 51%, Vuitton by 32%, while Hermès by “only” 20%. Analysts expect the public to welcome the news: the outlook, however, is for growth in value, but not in sales volumes.
Read also:
- Mulberry admits, “We lost our minds by raising prices”
- Ending price increments? Never: the routine starts again from Hermès
