|Region||Birkin 30||Birkin 35|
|US $ Equivalent||$7194||$7887|
|Region||Kelly 28||Kelly 32|
|US $ Equivalent||$6862||$7246|
(prices serve as guides only and are subject to currency fluctuations; prices do not take into consideration any VAT refunds; US equivalents were calculated based on today’s currency conversion rates; all prices of the bags are based on togo leather & retourne stitching)
Let’s break down the numbers. What are the possible implications for both the customer & the company?
- As the US dollar has grown in strength against the euro in recent months, the cost of Hermes bags in Europe has become correspondingly less expensive.
- Hermes, for the same bag, could get 10,900 USD selling the bag in the US vs $7,194 USD in France (see chart).
- US (& Asian) markets might see an increase in exclusive inventory to compensate for the European profit shift
- The devaluation of the euro against the dollar makes purchasing Hermes in Europe highly attractive for Americans and Asians.
- But, Hermes’s stringent retailing strategy protects the brand’s exclusivity and prevents the gray markets from flourishing. They are keeping themselves insulated from what other leading brands like Chanel are facing.
- Hermes might experience greater domestic brand loyalty as a result of the decision to keep euro prices status quo.
So my fellow handbag aficionados, shall we book a non-stop flight to Paris? After all, even including the price of airfare, the Birkin is still cheaper than at home…