What's Happening?
Hermès has reported a 9% increase in revenue for the third quarter of 2025, attributing this growth to the loyalty of its core clientele and increased production capacity. Despite a challenging market
environment, the luxury brand's CEO, Axel Dumas, highlighted the company's craft-based model and customer loyalty as key factors in its solid performance. The company saw significant growth in its leather goods and saddlery segment, which rose by 12% year-on-year. However, there was a decline in perfume and beauty sales by 5%, and a 3% drop in watches and jewelry sales. Hermès plans to continue expanding its manufacturing network and retail presence, with new leather workshops in France and store openings in the U.S.
Why It's Important?
The performance of Hermès is a significant indicator of the luxury market's resilience amid economic volatility. The company's ability to maintain growth through loyal customers suggests that high-end consumers are still willing to spend despite broader economic challenges. This trend could influence other luxury brands to focus on strengthening customer loyalty and expanding production capabilities. The expansion plans, including new workshops and stores, indicate confidence in sustained demand for luxury goods, which could have positive implications for employment and economic activity in the regions where Hermès operates.
What's Next?
Hermès plans to maintain its investment pace into the final quarter of the year, despite the volatile macroeconomic environment. The company is set to open new leather workshops in France over the next four years and expand its retail network with new store openings. These developments suggest a continued focus on quality and independence, which may further solidify its position in the luxury market. The company's strategy could prompt reactions from competitors, potentially leading to increased competition in the luxury sector.
