Hermes Increases Prices

Over the past few years, January has been the month to watch for price adjustments from luxury leaders like Hermes and Chanel. These have become a critical component of the industry’s strategy to navigate currency volatility and macroeconomic shocks. One of the largest of these shocks occurred following the UK’s infamous Brexit vote in June 2016 (read: Buying Bags After Brexit). The British pound tanked compared to currencies like the USD and Euro, but unlike in the past, companies didn’t immediately respond. Instead they tried to coast the wave of tourist spending in the UK following the vote (remember that a weaker pound means Americans, Europeans and Asians have more buying power in the UK). Even if they wanted to do something, it would have been difficult since no one really knew where the pound would ultimately stabilize. But now that markets have seemingly priced Brexit in and the holiday spending season is over, it appears the luxury industry might be starting to make their annual move.

Take a look below at some handbag math. We present 2016 and 2017 Birkin prices in the UK and Eurozone, taking into account the latest price increase, and show how wide the gap still is between American and European prices:

hermeseuropeuk

Hermes Birkin 35 - UK

birkin35

Region	Hermes Birkin 35 (Togo)
USA 2016	$11,900
UK 2016	£6,780
USD Equivalent	$8,245

UK 2017	£7,100
USD Equivalent	$8,634

Overall Increase	£320 (~5%)
USD Equivalent	$392 (~5%)

£1.00 GBP = $1.22 USD

Exchange rates refer to January 13th. Given the volatility of the pound, values may be subject to change.

Hermes Birkin 35 - Europe

birkin351

Region	Hermes Birkin 35 (Togo)
USA 2016	$11,900
Europe 2016	€7,750
USD Equivalent	$8,226

Europe 2017	€8,000
USD Equivalent	$8,492

Overall Increase	€250 (~3%)
USD Equivalent	$265 (~3%)

€1.00 Euro = $1.06 USD

Exchange rates refer to January 13th. Given the volatility of the euro, values may be subject to change.

This month, January 2017, Hermes opted to increase Birkin prices by 5% in the UK and 3% in Europe. This is a significantly smaller increase than last year, but makes sense given the global economic environment. The UK increase only brings prices closer to Birkin prices pre-Brexit, so it’s difficult to say if this will be the final increase of the year. If UK prices were to go up again over the summer we wouldn’t be surprised. Birkin prices have also seemingly gone up in the eurozone, but only 3%.

There’s no official word yet whether we should expect similar price increases in the USA but we’ll keep watching this space, stay tuned.