Despite the global luxury slowdown, Hermès is thriving.

The French luxury company has been successful in the luxury sector for nearly 200 years by focusing on quality, scarcity, and desirability.

Despite a decrease in consumer spending, demand for coveted products such as Birkin and Kelly handbags remains consistent, named after icons Jane Birkin and Princess Grace Kelly of Monaco.

Hermès' total revenue is accounted for between 25% and 28% by the Birkin and Kelly bags, which frequently increase in value on the resale market.

"According to Luca Solca, senior analyst of global luxury goods at Bernstein, the difficulty in obtaining the brand adds to its cachet and desirability. This signifies a distinction, which in turn increases the brand's desirability."

In fiscal year 2023, Hermès reported the fourth-highest revenue among major luxury fashion brands, surpassed only by and .

Despite having fewer than 300 storefronts, Hermès manages to keep up with its larger competitors. In its most recent quarter, Hermès experienced double-digit revenue growth, while LVMH and Kering reported sharper-than-expected declines in sales. Additionally, Hermès' shares have risen more than 10% since the start of 2024, while LVMH and Kering have fallen about 15% and about 40%, respectively.

Experts predict that luxury consumers will continue to pull back on spending, particularly aspirational buyers, globally in 2023 and 2024.

Despite performing well in Q3, Hermès reported slower sales growth in all regions compared to the previous year. The company's earnings call revealed that, although there was lower traffic, customers spent more money per transaction.

"According to Solca, high-end consumers have become a greater focus for the industry because they have a high propensity to spend, but only if they receive something that they consider valuable and unique. In Solca's opinion, Hermès excels in distinction."

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