Luxury fashion brand Hermes has announced its US customers would have to bear the brunt of the tariffs imposed upon the company’s products by President Donald Trump.
French company Hermes this week became the world’s most valuable luxury company by market cap after competitor Louis Vuitton reported a 5% sales drop in its all-important fashion and leather division.
The company also announced on Thursday that its Q1 2025 sales had slightly missed market expectations owing to a continued lull in China.
Family-controlled Hermes is banking on its exclusivity to add a premium to all its products sold in the United States.
This comes on top of 6 – 7% regular price adjustments made earlier this this year.
Confirming this the company’s Finance Chief Eric du Halgouet stated “We are going to fully offset the impact of these new duties by increasing our selling prices in the United States from May 1, across all our business lines,”
The brand known for its Kelly and Birkin handbags, which sell for at least $10,000, reported sales for the three months ending in March of 4.1 billion euros ($4.66 billion), a 7% rise on a constant currency basis, but below analyst’s expectations for 9.8% year-on-year growth. Most analysts in the aftermath stated the performance was “not up to the usual Hermes standards,”
The company has stuck with its principle of production increases of only 6% to 7% each year to maintain the exclusive aura around its leather goods which has made the company resilient.
“Of course, we are cautious about the United States given the discussions, the geopolitical uncertainty which, as you know, have caused a great deal of volatility on the financial markets,” Eric du Halgouet concluded.
The latest U.S. tariffs could include a 20% charge on European fashion and leather goods and 31% for Swiss-produced watches if fully applied with Trump’s 90 days tariffs pause and setting a general 10% duty rate instead only providing a short respite to luxury goods companies.
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