Hermès announced financial results for the last quarter of 2017 and, to us at PurseBop, the big news isn’t that it missed its targeted growth in revenues, but rather that the sales numbers are consistent with what we, as Hermès shoppers, experienced. For much of 2017, Hermès sales revenues grew by double digits. The increases slowed at the end of the year, to 5%, missing expectations of 6-11% likely only due to depleted stocks from the glorious first three.
Why? Well, according to the company, there wasn’t enough leather stock for the Christmas season. No offense to the financial advisors, analysts, consultants and management, but we could have told you that. It is a constant complaint by Hermès fanatics that leather merchandise, particularly handbags, isn’t readily available. But it seemed worse at the end of last year. Late December in Paris, there was limited inventory at FSH, and Sevres reported it had none. Moreover, in the last days of the year, there was little stock of classic blankets and dinnerware.
As we’ve written in the past (read: Is Hermes Still Playing Hard To Get?), Hermès is working on boosting its leather production with new workshops that are coming on line now through 2020. Whether Hermès supply keeps up with demand for Birkins, Kellys and Constances, remains to be seen as these highly-coveted bags have historically been difficult to acquire. As what should perhaps be dubbed the Holy Trinity of handbags, they are virtually the only ones not available for purchase on Hermes.com.
This is key because Hermès is committed to enlarging its digital presence and sales. As part of this, the array of merchandise on the website has greatly expanded both in scope and price range (read: Would You Buy An Exotic Hermès Online?). Hermès recently revamped its website in the United States and Canada to be more user friendly, interactive and mobile. An upgrade to the European website is due in the first quarter of 2018 and to the Chinese website by year-end. Internet sales are anticipated to boost Hermès revenues, build a broader customer base, as well as provide additional purchasing outlets for those not located near a boutique.
We wonder how, if at all, Hermès’ goal of increased accessibility meshes with the brand’s hallmark – exclusivity. On some level they seem utterly contradictory. On the other hand, we suspect that if any luxury goods company can walk that tightrope, it is Hermès.