Is Hermès Truly Unstoppable? Despite efforts to diversify, Hermès continues to lean heavily on a couple of product categories and geographies.
Its leather goods and ready-to-wear categories, remain its core pillars. Leather goods accounted for 42% of total revenue in Q3 2024, growing at a modest 3% CAGR over the past 10 quarters. Similarly, the ready-to-wear and accessories category contributes significantly at 31%, with a 5% growth rate. However, the brand’s initiatives in beauty and watches have shown limited traction, with beauty growing just 1% and watches even declining by 1% over the same period.
From a regional perspective, Europe has emerged as the strongest growth market, increasing from 22% of total revenue in 2022 to 26% year-to-date in 2024. Asia-Pacific (excluding Japan) remains Hermès’s largest market, comprising 43% of revenues, even as China’s economic challenges have impacted growth. In contrast, the Americas and Japan continue to represent smaller shares, with their growth rates plateauing.
With rising economic uncertainties in Asia, stagnant performance in the Americas, and heightened competition in Europe, could Hermès’s growth trajectory be at risk? As the brand relies on high-ticket items and premium positioning, maintaining resilience amidst global slowdowns may require more aggressive diversification strategies beyond its traditional strengths.
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