Not everyone has been hurt by a lack of interest from the market in China or the depreciation of the British Pound.
Hermès announced record sales from this past year, seeing a thirteen percent rise reaching $1.22 billion for 2016. The handbag retailer has been able to build upon their staple leather goods that saw a fourteen percent rise in sales alone.
Chief executive officer for Hermès, Axel Dumas, commented in Paris on March 22nd about their strategy heading into 2017, also tempering expectations to a degree.
“There is no change in strategy. The year of leather was quite exceptional and we are not expecting that every year,” Dumas stated.
Referring to 2016, he added that “all the stars aligned” before stating that Hermès is expecting a “normal” growth rate for 2017.
While leaning towards a realistic year to come, his comments may point to other aspects of their business model. The brand has long been known for their select quantities for releases, leading to waiting lists full of anxious consumers.
Changing from that format is no certainty, but the strategy and pricing around their business will play a strong role in that decision.
“We don’t have a marketing department, and therefore our prices are not determined by the desirability of the product; its price positioning with regard to the competition, or what people are willing to pay for it. It is determined by its manufacturing cost,” said Dumas.
Their handbags increased in price by 3 percent in Europe this year as a result of manufacturing costs. This was the only instance seen of a price hike from Hermès and apparently didn’t drastically affect their sales numbers, but the adjustment to the financial landscape around them shows the brand’s willingness to adapt.
Particularly for availability, doing so in the future could definitely adjust the distribution of their coveted handbags. Hermès has already surprised the industry though in 2016, bringing endless possibilities to their upcoming results a year from now.