Since its founding in 1837 by Thierry Hermès in Paris, Hermès has epitomised craftsmanship, sophistication and timeless elegance. Originally a harness workshop catering to the aristocracy, the brand has evolved into a global luxury powerhouse renowned for its iconic leather goods, exquisite silk scarves and celebrated timepieces. Hermès has set the standard in haute couture and craftsmanship, and – with time – transformed its products into coveted investment pieces.
The journey of Hermès began in a modest workshop crafting finely detailed leather harnesses for horse-drawn carriages. Thierry Hermès’s unwavering commitment to quality quickly attracted a loyal clientele among European aristocrats. As the company expanded, it ventured into leather goods, launching its first handbag in the 1890s. This marked the beginning of Hermès’s illustrious legacy in fashion accessories.
The brand truly solidified its iconic status in the 20th century with the introduction of the Kelly bag in the 1930s, named after Grace Kelly, and the Birkin bag in the 1980s, inspired by actress Jane Birkin. Each bag is handcrafted by skilled artisans, often taking hundreds of hours to complete, making them a testament to Hermès’ dedication to craftsmanship and attention to detail.
Did you know that the Birkin bag was born from a chance encounter on a flight, where Jane Birkin expressed her frustration with the lack of practical yet stylish bags to then Hermes CEO Jean-Louis Dumas? This conversation not only transformed the fashion landscape but also created one of the most sought-after luxury items in the world.
Hermès has always been a step ahead when it comes to branding and marketing. With a laser focus on exclusivity, the brand ensures its products are available only through select channels, enhancing their desirability. The signature orange box and minimalist design have become instantly recognisable symbols of luxury. Rather than relying on traditional advertising, Hermès cultivates a sense of mystique, emphasising craftsmanship and heritage.
One thing that Hermès is really good at, is that it expertly utilises storytelling in its marketing, creating emotional connections between customers and its storied history. For instance, limited-edition collections and bespoke offerings generate buzz that captivates luxury consumers. This narrative-driven approach has played a pivotal role in Hermès’s success and is something that few brands have been able to replicate.
By weaving a narrative that highlights rarity and bespoke artistry, Hermès has successfully positioned itself as a leader in the luxury market. Each piece – whether it’s a scarf, handbag or watch – serves to enhance the brand’s desirability. The exclusivity of Hermès products creates a sense of urgency for buyers, reinforcing the idea that owning a piece of Hermès is about being part of a legacy, rather than just making a purchase.
In recent years, Hermès products have made a striking transition from luxury items to valuable investment assets. Certain models, particularly the Birkin and Kelly bags, have seen staggering appreciation rates. According to the Luxury Handbag Index, the value of the Birkin bag has increased by over 500% in the past decade – outpacing traditional investments like gold and stocks by a mile.
*Source: https://sothebysrealty.ae/the-journal/most-expensive-birkin-bag/
As of early 2024, the luxury market has experienced some shifts, with certain Hermès products seeing a slight dip in prices. However, this presents a unique opportunity for savvy investors to acquire coveted pieces at potentially lower prices. Models like the Birkin and Kelly bags have seen modest price adjustments, making now a potentially good time to invest.
Adding to this optimism, Hermès reported impressive revenues of €13.4 billion in 2023, reflecting a 21% increase at constant exchange rates. The group’s operating income rose by 20% to €5.65 billion, with a net profit of €4.31 billion, marking a remarkable 28% growth. This robust performance highlights the strong demand for luxury items, particularly their iconic handbags. In response, Hermès is actively expanding its production capacities to meet this increasing demand.
Given this context, the enduring appeal of Hermès products, combined with their limited availability, suggests a positive outlook for value appreciation.
Acquiring Hermès products – especially its bags – through traditional retail typically involves extremely long waitlists as well as a waitlist for the waitlist (should you even manage to get on the waitlist for the waitlist). However, exploring reputable resale platforms and auctions provides an alternative way to find vintage and rare pieces, allowing buyers to tap into Hermès’ rich heritage while potentially securing valuable investments.
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Hermès has evolved from a prestigious harness maker to a highly desirable luxury brand, thanks to its unwavering commitment to craftsmanship and exclusivity. Despite market fluctuations, Hermès products generally appreciate in value, often outpacing traditional investments. The brand’s limited production, exceptional quality and strategic positioning ensure that its offerings remain valuable and sought after, solidifying Hermès’s place as a luxury powerhouse in the world of investment.
In a world where trends come and go, Hermès stands as a testament to enduring style and value – proof that luxury and investment can and will continue to go hand in hand.
Since its founding in 1905 by Hans Wilsdorf and Alfred Davis in London, Rolex has set the benchmark for precision, elegance and innovation in horology – and transformed its timepieces from mere luxury items into some of the most sought-after investment pieces around.
