Hermès sees sales spike as luxury market rebounds from COVID-19
The French fashion house generated $2.50 billion in sales
Will luxury retail make a post-pandemic comeback in 2021?
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The Birkin bag continues to carry itself through even the hardest of economic times.
Hermès, the French fashion house and maker of the Birkin handbag, proved it could thrive during the COVID-19 pandemic, generating a whopping $2.50 billion in sales — that’s a 44% increase compared to 2020, and up 33% from sales in 2019 for the first quarter, the company reported.
The strong sales growth proved that wealthy shoppers will splurge on luxury items even during the most uncertain financial times.
Kim Kardashian is one of many stars invested in Hermès' Birkin bag. (Photo by JJ/Bauer-Griffin/GC Images)
The growth, the company said, was spurred by Asia and Japan and an uptick in the American market. By the end of March 2021, product categories including ready-to-wear and accessories saw a 51% increase.
LUXURY HANDBAGS GET BIG RETURN ON INVESTMENT
"In a still unstable context, our strong sales growth confirms the robustness of our sustainable artisanal model and the desirability of our collections to our customers all over the world," Axel Dumas, executive chairman of Hermès, said in a statement Thursday.
Global luxury sales online increased nearly 50% to around $59 billion in 2020, compared with around $39.7 in 2019 before the pandemic hit, according to Bain & Co. as reported by Barron's. And as millions become vaccinated against the COVID-19 virus, bolstering confidence in consumer spending as more people becoming more comfortable traveling and shopping in stores again, sales of luxury goods such as handbags are likely to continue to drive more demand.
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LVMH, which owns brands such as Louis Vuitton and Dior, reported first-quarter revenues up 8% from 2019 before the pandemic hit. And Gucci, which makes up 60% of revenues for parent company Kering, which also owns luxury labels such as Saint Laurent, reported Gucci’s comparable revenues were up by 24.6% of analysts’ estimates for 19% growth.
More shoppers have shown interest in buying luxury bags as investment pieces long before the pandemic hit. Hermes items, for example, are projected to retain a value of over 80% on the resale market, while other designers like Gucci and Chanel retain a value that's between 60% to 70%, FOX Business previously reported.