French luxury goods company Hermes plans to raise prices next year. When Hermes was reported to have announced the group’s performance in the first half of the year, it was reported that the group planned to raise prices next year and some of the prices of raw materials, such as silk and leather, were partly due.
The latest results show that in the first half of fiscal 2013, sales of Hermes reached 1 billion 767 million 200 thousand euros, an increase of 11% over the same period last year, and net profit increased by nearly 14% over the same period last year. Among them, apart from Japan, the Asia Pacific region maintained growth momentum, an increase of 17% over the same period last year, and Hermes said that the Chinese market continued to show strong vitality. However, sales of Hermes watch business fell by 1% in the first half of this year due to the general downturn in the watch industry.
Announcing the results, Hermes announced that it would raise the price next year. Hermes’s rivals, such as Louis Vuttion and Gucci (Gucci), have started to raise prices earlier this year.
Like these competitors, herm herm’s price rise next year is attributable to an increase in raw material costs, which can ease the impact of exchange rate fluctuations on the brand. For example, the yen weakened against the euro, while the Japanese market accounted for almost 1/5 of Hermes’s global sales. Similarly, since July this year, Louis Weedon has raised the average price of handbags, wallets and other leather products in the Japanese market by about 8%, in order to counter the weaker yen.