Hermes Still Confident Despite Chinese Financial Crisis

Hermes Still Confident Despite Chinese Economic Downturn

With the rest of the luxury market fretting about China’s economic woes, Hermes, helmed by CEO Axel Dumas, is holding steady and still confident that it can hit its 8% growth target. While the company’s stock is down, its confidence isn’t. Referring to market fluctuations arising from China’s currency situation, Dumas calmly asserted to the WSJ, “We’ve resisted this in the past.”

Contrary to other luxury brands like Prada, Hermes reported strong international first-half profit growth and revenue, with a significant portion of growth coming from Japan. Japan is one of the top destinations for Chinese tourists, so this data is not surprising. While much of the fashion press primarily focuses on Europe, Japan’s sales numbers may actually provide a better perspective on the state of the Chinese luxury consumer and should be watched accordingly.

Hermes Store in Tokyo, Japan – Ginza District

From this WSJ piece, it doesn’t appear Hermes is introducing any price changes. They’re seemingly confident in their position as the top luxury brand. But, in a rapidly changing global economic environment the status quo isn’t always the safest play. Keep an eye on the Japan numbers, if there’s any weakness there, a price cut in China could be possible after all…