"Everyone Says They Don't Buy Luxury Goods..." This Company Hits 6 Trillion Won in Sales and Is Thriving

Price Increase of 6-7% This Year Shows Confidence
"The Key Is a Small Number of Loyal Customers"

Global luxury brand Hermes posted better-than-expected results despite the economic downturn.

According to CNBC on the 14th (local time), Hermes announced that its sales for the fourth quarter of last year (October to December) reached 3.96 billion euros (approximately 5.9765 trillion KRW) based on constant exchange rates. This represents a 17.6% increase compared to the same period last year. Initially, LSEG analysts had predicted about 3.609 billion euros, but actual sales exceeded those expectations.

Herm?s. Yonhap News Agency

Annual sales also reached 15.2 billion euros (22.942 trillion KRW), surpassing market forecasts and increasing by 14.7% year-on-year. CNBC explained, "While other luxury brands have faced difficulties in recent years, Hermes has solidified its position with its unique appeal." Hermes stated, "We expect sales to increase in the medium term based on constant exchange rates," but also cautioned, "There is a need for vigilance due to global economic and monetary uncertainties."

In light of these strong results, Hermes announced plans to pay a bonus of 4,500 euros to more than 25,000 employees. Additionally, shareholders will receive a special dividend of 10 euros per share.

Axel Dumas, Chairman of Hermes, said, "Loyal customers are crucial to maintaining sales growth amid an unstable environment," adding, "Thanks to the strengths unique to the Hermes model and the company's agile response, we were able to achieve these results despite the increasingly uncertain economic and geopolitical situation last year. I sincerely thank everyone." He also revealed, "We raised product prices globally by about 6-7% this year," and expressed confidence, saying, "We are entering this year with confidence and will continue to pursue sales growth."

Meanwhile, domestic luxury consumption sentiment has declined compared to before due to the economic recession. According to Lotte Department Store, the growth rate of luxury brand sales, which was 35% in 2021, dropped to 5% last year. However, most luxury brands including Hermes, Rolex, Dior, and Chanel continued to raise prices citing increases in raw material costs and exchange rates. It is presumed that brands consider it more effective to sell multiple products to a small number of loyal customers rather than selling to a large number of people.