As Hermès’s profits soar, the French luxury group says it cannot keep up with consumer demand.The Birkin maker reported a 50% surge in profits for the first half of the year and based on strong demand for its exclusive handbags in the US and Japan. Sales jumped 22% to €1.31bn in the year to June.
But Chief Executive Patrick Thomas cautioned investors that the rate of growth is likely to slow, as the company simply can’t produce stock fast enough to keep pace with global lust for its Kelly, Constance and Birkin bags. Even natural disasters haven’t quelled shopper appetites, the brand said.
‘We haven't yet seen a reduction in the number of people coming into our shops, not even in Japan [following the earthquake and tsunami disaster]’, Thomas said, reported the Guardian. ‘The trend is still very good, but is lower than that of the first half. This is not at all due to a drop in the number of people in our stores. There are stores where we are a little tight on stocks. This isn't an alert. It's not serious. We are selling at the rate we are producing.’
Hermès has always resisted efficiency drives—most Birkin bags take a single craftsperson two full days to create—but the company said it has added nearly 400 new workers to speed its production times.
To be honest, I'm not surprised at all. Hermès Birkin is chic, classy and timeless, and so everyone wants it, despite the high price.