Hermès Trots Ahead of the Competition in 2025

Image courtesy: Hermès

Hermès may have hiked prices in the U.S. to tackle tariffs, but luxury lovers aren’t backing down—and neither is the Maison. Despite price increases, tariff pressures, and softening demand in parts of Asia, Hermès still delivered enviable results in the first half of 2025. Will prices rise again? We’ll explore that later.

Hermès reported revenues of €8 billion by the end of June, up 8% at constant exchange rates (and 7% at current) compared to the same period in 2024. Leather Goods and Saddlery alone contributed €3.58 billion — a robust 12% increase — while all geographic regions posted growth. Momentum picked up in Q2, with sales reaching €3.9 billion — a 9% rise at constant exchange rates. Just last week, LVMH reported a 3% decline in revenue for H1 2025, with a serious hit coming from its cornerstone Fashion & Leather Goods division, which fell 7% organically.

Axel Dumas, Executive Chairman of Hermès, stated:

“The solid first-half results across all regions reflect the strength of the Hermès model…Our house pursues its investments in production capacity and securing our supply chain, as well as exclusive distribution network to accompany the pace of long term momentum of the house.”

Image courtesy: @ingridwilkinson

All geographical areas recorded growth in the first half of 2025, underscoring Hermès’ resilience amid challenging market conditions. The Americas led the way with a robust 12% increase in revenue, powered by strong double-digit performance in the United States. This growth came despite a volatile environment and Hermès’ second price hike in response to tariffs, highlighting the brand’s enduring appeal in the region. Notably, New York hosted the interactive “Mystery at the Grooms” event in June, showcasing the creativity of Hermès’ 16 métiers.

Europe also showed solid momentum, with total growth of 11% across the continent. France grew 9%, buoyed by strong sales in the local boutiques, while Europe, excluding France, saw a 13% increase, supported by loyal local clients and strong tourist momentum. Key highlights included the 15th edition of the Saut Hermès returning to Paris’ Grand Palais and the reopening of Hermès’ expanded store in Florence, Italy.

Asia presented a mixed but positive picture. Japan continued its remarkable expansion, posting 16% growth driven by loyal local clients and a qualitative distribution network. Meanwhile, Asia excluding Japan grew a steadier 3% in the second quarter, supported by customer loyalty and key store reopenings in Macao, Taiwan, and Bangkok. Axel Dumas noted that Chinese customers remain cautious, buying less and saving more amid ongoing economic uncertainties, maintaining a “wait and see” attitude toward significant market recovery.

Image courtesy: @myhcatalog

As for the different métiers, most showed strong growth in the first half of 2025, though watches and beauty faced some setbacks. The Leather Goods and Saddlery division, Hermès’ largest revenue contributor, climbed 12%, driven by sustained demand and new hits like the Faubourg Express, P’tit Arçon and Médor bags.

The Ready-to-Wear and Accessories segment grew 6%, boosted by the successful Fall-Winter 2025 collections, including standout shows in Paris and Shanghai. Silk and Textiles continued its steady momentum with 4% growth, thanks to diverse creations and rich materials.

The Other Hermès sectors — including Jewelry and Home — rose 10%, driven by creative momentum such as the white gold Adage jewelry line and new homeware collections revealed at Salone del Mobile. The groundwork is also underway for a new Tableware workshop in Couzeix, signaling growth ahead.

On a less upbeat note, Hermès’ Perfume and Beauty division saw a 4% decline in sales, reflecting a tough comparison to last year’s strong second quarter, which benefited from launches like Barénia, Hermessence Oud Alezan, and H24 Herbes Vives perfumes. Despite this, the category was refreshed with new additions such as Terre d’Hermès Eau de Parfum Intense and the Rouge Brillant Silky lipstick. Meanwhile, the Watches métier faced an 8% drop amid ongoing market challenges but continued to develop its offerings. Looking ahead, Hermès plans to boost watch production capacity with an expansion of its Noirmont site, set for completion by 2028.

Image courtesy: @iitsninaaaa

During the Q&A portion of Hermès’ presentation, Axel Dumas, was asked about tariffs in the U.S. He confirmed that Hermès implemented a price increase in early May to offset new tariffs, which ranged from approximately 3.4% to 7.1% depending on the product category. Handbags saw an average increase of 5.1%. Dumas reiterated that further tariff costs will be passed on to US purchasers, but the extent to which Hermès products may or may not be affected is yet to be determined. He stated, “We’re waiting to see how things develop.”

On client demographics, Dumas noted a slowdown in first-time buyers — particularly for entry-level items like belts, perfumes, and silk scarves — as many consumers worldwide are adopting a more cautious spending approach amid economic uncertainty. However, he emphasized that Hermès retains a loyal core customer base that continues to drive strong repeat business.

Asked about the recent Sotheby’s sale of the first Birkin bag for €8.6 million (approximately $10.1 million USD), Axel Dumas made it clear that Hermès did not participate in, nor would they ever participate in, such secondary market sales. He described the moment as “very touching,” highlighting Hermès’ special relationship with Jane Birkin. Dumas emphasized the brand’s pride in its authenticity and the trust it shares with customers, which remains strong even during challenging times. However, he expressed concern over the growing secondary market, noting that the reselling of new bags can undermine Hermès’ relationship with its clients by diverting products away from them.

Image courtesy: @the.life.of.niels

As for what’s coming up, Hermès is preparing to meet future demand by expanding production capacity, with a new leather goods workshop in L’Isle-d’Espagnac (Charente) set to open in September 2025, and additional sites under construction in Loupes (Gironde) and Charleville-Mézières (Ardennes) scheduled for 2026 and 2027. A tenth leather goods hub is planned in Colombelles, Normandy, for 2028.

Looking ahead, despite ongoing economic, geopolitical, and monetary uncertainties worldwide, Hermès remains confident in its long-term strategy. While the group reaffirms ambitious revenue growth targets, there is cautious attention on how tariffs and inflationary pressures—particularly in the U.S.—might impact future pricing strategies. Although Hermès currently has no announced plans for further price hikes following the May increase, market watchers speculate that additional adjustments could be on the horizon.