Hermes grew its quarterly sales by 13% to 3.7 billion euros, largely thanks to its leather goods, which grew by almost 18%.
👉 Background: Hermes is the French luxury design house founded back in 1837 by Thierry Hermes. It started by selling saddles for horses, but now, it’s known for handbags like the Birkin and Kelly which cost at least $20,000 a pop.
👉 What happened: While LVMH and Kering both missed their earnings forecast, Hermes keeps steaming ahead. It grew its quarterly sales by 13% to 3.7 billion euros, largely thanks to its leather goods, which grew by almost 18%.
👉 What else: And it's all thanks to Hermes' tight management of supply, which makes it extremely exclusive, and keeps the value of these bags growing...even on the resale market.
💡 In the world of high-end fashion, luxury goods often hold their value over time, making them a type of alternative investment.
💡 But, there’s a method behind this mad success. Hermes intentionally maintains a low supply, particularly for their iconic items like the Birkin. This scarcity often results in their products appreciating in value over time.
💡 Get this: Birkin bags have appreciated at an average annual rate of 14.2% over the past 35 years. That means it has outperformed the S&P 500, ASX200 and gold which is quite unique in the world of retail.
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