It’s hard to imagine that much keeps Bernard Arnault, generalissimo of luxury conglomerate LVMH (who is personally worth around $299 billion) up at night. But on the shortlist of things which might possibly cause The Republic’s richest man to lose sleep, Hermès’ recent financial performance has got to be up there.
The vaunted (and still largely family-run) maker of premium leather goods – renowned for classic handbag designs like the ‘Kelly’ – soared to a milestone valuation of AU$326 billion (€200 billion) earlier this week – now making it the 8th most profitable company on the STOXX Europe 600 index, worth twice the street value of Airbus.
According to reporting by Bloomberg, this record performance is down to strong confidence among investors in high-end consumer luxury; and the steady comeback of the Chinese market following three years of nationwide lockdown.
Despite widespread fears of an extended slowdown in the global economy, Hermès has posted particularly impressive results in the post-pandemic luxury goods sector.
Sustained demand for trend-proof leather goods, coupled with the brand’s own tightly administered supply chain, have enabled Hermès to chase double digit growth over the past two years.
The magnitude of this achievement is underscored by Hermès’ recent strategic initiatives: throughout the first half of 2022, the company onboarded an additional 800 workers – many of whom will be posted to the brand’s new state-of-the-art leather goods workshop in Normandy. The 6,200m² facility officially opened last Friday.