The Birkin – the world’s most desirable accessory | Source: Getty Images

Hermès to Open More Factories as Demand for Birkins Soars

Across the luxury goods sector, the pandemic proved no match to cashed-up consumers’ willingness to spend big. With travel largely off the cards, the disposable income of the world’s wealthiest was significantly spent on collectible luxury items, including high-end investment bags like the iconic Hermès Birkin and Kelly.

To meet increased demand for Hermès staple bags, as well as new designs like the Della Cavalleria and 24/24, the Maison is expanding its production capacities with three new factories across France. A production site in Louviers will open this year, a Sormonne site in 2023 and the third site in Riom is scheduled for 2024.

Last year, someone coughed up almost half a million dollars for a rare 2014 Himalaya Birkin handbag by Hermes | Picture: AFP/Isaac Lawrence

Despite the Maison’s plans to ramp up production capacity, demand for its luxury accessories is applying pressure on the brand’s financial performance. The Birkin bag maker said sales grew by 11 per cent in the fourth quarter of 2021. This was below analyst expectations, as self-imposed production caps meant the group could not keep up with demand for its prized handbags.

Hermes opened a new workshop in Saint-Vincent-de-Paul near Bordeaux, France, in September. Photo: Philippe Lopez/ AFP via Getty

It takes 15 hours for a Hermes bag. Even if there’s a lot of demand, I’m not going to start doing them in 13 hours to raise production

Hermes Executive Chairman, Axel Dumas

Hermés also delivered on its commitment to strengthening its local presence with the opening of its own leather-working school in France called the École Hermès des savoir-faire.

The luxury goods sector has experienced a V-shaped recovery after the COVID pandemic hammered sales in 2020. Luxury brands, unlike other consumer brands, face less restraint by shoppers amid soaring inflation due to affluent customers who are willing to pay higher prices for designer goods. Hermès has increased global prices by 3.5 per cent on average this year and has no plans to increase prices to boost its results.

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