Inside the Hermès’s new Miami Design District flagship | Source: Hermes

Luxury Powerhouse Hermes Boosts Stock By Joining Euro Stoxx 50

French luxury company Hermes is poised to join Europes blue-chip Euro STOXX 50 equity index coming into effect on December 20. The inclusion will see the brand replacing Universal Music Group and likely fuel further demand for its shares.

Many luxury groups have reported soaring sales since a dip in the first six months of the pandemic. Consultancy firm Bain & Company said that in its 20 years of publishing the Luxury Study “it has never seen a year of surging performance to match 2021.”

Cartier owner Richemont said sales in the six months to 30 September 2021 increased 63 per cent year-on-year to €8.9bn, while its operating profit of €1.9bn was 331 per cent higher than in 2020 and 67 per cent higher than in 2019.

Share in Hermes, which also posted stronger-than-expected third-quarter sales in October, are up nearly 90 per cent in 2021, hitting record highs.

The company is now valued at over A$283 billion.

The move onto the Euro Stoxx 50 continues the brand’s accent of the luxury goods market which has seen huge profits this year as returning shoppers spend big. Its year-to-date stock is up 60 per cent and up 18 per cent over the month from early November.

A terrazzo-and-plaster staircase swoops dramatically through the centre of Hermès’s new Miami Design District flagship | Source: Architectural Digest
The Hermès’s new Miami Design District flagship | Source: Architectural Digest

In a highly competitive industry, Hermes has iconic status as one of the most innovative luxury brands around the globe. Its authenticity and trust in the heritage, craftsmanship and quality of its product is one of its main selling points. Its iconic fashion silhouettes like The Hermes Birkin and the Hermes Kelly handbags are some of the best designer handbags to invest in, now maybe even more so.

Competitors such as LVMH, who own luxury brands such as Louis Vuitton and Dior, has also enjoyed success in a thriving market. It recorded A$71.9 billion euros revenue in 2020 spanning across a retail network of over 5,000 stores worldwide.

If you’re interested in reading more about luxury brands, have a look at the A$248b man behind the LVMH empire.

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