Luxury fashion brand Hermes has firmly stated its position on not entering the thriving second-hand luxury market, in contrast to some of its competitors. The CEO of the company, Axel Dumas, believes that the resale market poses a threat by driving up prices and increasing the risk of counterfeit goods. He also highlights that engaging with resellers would not be beneficial to their regular customers who prefer to purchase directly from Hermes stores.
While many luxury brands have been cautious about the second-hand market, some are reconsidering their stance due to the growing interest in pre-owned fashion, particularly among younger consumers who are concerned about the environment. However, Hermes has built its reputation on carefully managing its production and stocks, contributing to its exclusivity.
The brand has implemented output caps to ensure that the demand for its high-end handbags, specifically the highly sought-after Birkin model, always exceeds supply. The Birkin bag often has waiting lists, and its resale value can sometimes even surpass its retail price. Hermes prefers to maintain a personal connection with its clients through in-store visits and does not sell its prized handbags online.
Dumas explains that the demand for Hermes products has consistently exceeded supply for many years. The company has chosen to limit the growth of its leather goods production to 6% to 7% annually to uphold its commitment to quality. Additionally, Hermes is currently constructing five new leather workshops in France, which will be operational within the next five years.
The brand’s philosophy revolves around producing goods of the highest quality, and Dumas emphasizes that they will not compromise on this, even if it means facing production bottlenecks. Crafting a Birkin bag, for instance, requires 15 hours of skilled labor. Dumas states that Hermes prioritizes quality and will not increase production at the expense of craftsmanship or the beauty of materials.
LVMH, a larger competitor of Hermes, shares a similar disinterest in participating in the second-hand market. Instead, LVMH focuses on offering repair services for its products as part of its sustainability initiatives.
In conclusion, Hermes remains firm in its decision to not venture into the growing second-hand luxury market. The brand’s dedication to exclusivity, quality craftsmanship, and personalized customer experiences sets it apart from competitors who are embracing the resale trend. By staying true to its core values, Hermes aims to maintain its coveted status as a luxury brand in the fashion industry.
Links:
1. Hermes Official Website
2. LVMH Official Website
