French luxury goods maker Hermes plans to raise prices next year. According to reports, Hermes recently stated in the first half of the group’s results that the group plans to raise prices next year. Rising prices for raw materials such as silk and leather are part of the reason.
The latest published results show that Hermès sales in the first half of fiscal 2013 reached 1.672 billion euros, an increase of 11% year-on-year, and net profit increased by nearly 14% year-on-year. Among them, the Asia-Pacific region except Japan maintained a growth momentum, an increase of 17% year-on-year. Hermes said that the Chinese market continues to show strong vitality. However, due to the general downturn in the watch industry, sales of Hermès watch business fell 1% in the first half.
公布 While announcing the results, Hermes announced that it will raise prices next year. Rivals such as Louis Vuttion and Gucci have already started to raise prices earlier this year.
这些 Like these competitors, Hermès attributes the price increase next year to the increase in raw material costs, and this move 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 a fifth of Hermès’ global sales. Similarly, since July this year, Louis Vuitton has increased the average price of leather goods such as handbags and wallets in the Japanese market by about 8% to counter the weak yen.
In fact, luxury brands in the world are based on changes in the euro exchange rate as the basis for price increases. This time, it is also a normal price adjustment. Before the spring and summer new products and autumn and winter new products are listed, they are an opportunity for luxury brands to adjust their prices .
Mi Michel Gutsats, the director of MBA and EMBA at Marseille Business School in France, said in an interview with ‘First Financial Daily’: ‘Usually such price increases occur 2 to 3 times a year.’
The normal price increase every year has caused a large price increase for luxury goods in the past few years. Statistics from the US Bureau of Labor Statistics show that the price of luxury goods has risen by 60% in the past 10 years. Reasons for the price increase include: the rising cost of raw materials costs; seasonal discounts also lead to price increases; more and more emerging wealthy.
Industry professionals analyzed in an interview with this reporter: ‘Inflation, raw materials, and rising labor costs are all objective reasons. Raising prices is also a strategy for luxury brands to maintain their high-end image.’
Recently, Minister of Finance Lou Jiwei mentioned in his report to the Standing Committee of the National People’s Congress that the next step will be to expand the scope of the consumption tax, and include some products that seriously pollute the environment, consume excessive resources, and some high-end consumer goods. Adjust consumption tax collection links and tax rates. In the industry’s opinion, this will also be one of the reasons for luxury brands to raise prices in the near future.
For the future, He Bin, director of China for Italian men’s luxury brand Kiton, said in an interview with this reporter: ‘True high-end, high-quality luxury goods will continue to rise in price.’
The constant rise in prices of luxury goods also makes the market ‘buy luxury goods to maintain value’, but industry insiders do not agree: ‘Now luxury goods are basically mass-produced, which has greatly reduced the exclusiveness and scarcity of luxury goods , Only a very small amount of antique-type luxury goods still have value preservation, and nowadays luxury goods circulating within a larger audience have basically no value preservation. ‘...