French luxury fashion giant Hermès defied the luxury slowdown as its profits grew 28% in 2023, and promised a big reward to its staff.
Revenue came to €13.4 billion, up 21% from last year, with accessories like gloves or hats and watches like the H08 line among the best-performing products. That helped profits rise to €4.3 billion (£11.4 billion).
The Birkin and Kelly bag maker expects sales to grow further in 2024.
Hermès’ performance contrasts with Gucci owner Kering, which yesterday reported a fall in sales for 2023. Commentators had feared that the boom in luxury spending after the pandemic had been followed by a dramatic slowdown in the second half of 2023.
Axel Dumas, executive chairman of Hermès, said: “In 2023, Hermès has once again cultivated
its singularity and achieved an outstanding performance.
These solid results reflect the strong desirability of our collections and the commitment and talent of the house’s women and men. I thank them all warmly.”
In recognition of its staff, the business will pay a €4,000 bonus to all of its 22,400 employees. That’s the same size as the bonus it handed out last year.
According to its most recent Companies House filings, Hermes had 252 employees in the UK at the end of 2022. Including locations in department stores, it has 10 stores in the UK, of which nine are in London, including a Bond Street flagship.
The shares rose by 4.8% this morning in Paris to €2,175. They’re up 27.3% over the last year.
Yanmei Tang, analyst at Third Bridge, said: “Hermès reports strong Q4 2023 earnings, demonstrating resilience in the luxury sector amid an economic downturn.”
