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The Products Are In Short Supply, Hermès Will Produce More Scarves And Handbags.

Oct 22, 2019

Hermes Group plans to expand its textile center in Pierre-Bénite, France, to hire a quarter of its employees and expand its production capacity to meet the growing demand of Asian consumers for silk and textiles. The Pierre-Bénite Textile Center is part of the Holding Textile Hermès, specializing in printing and finishing fabrics. In the next three years, the center will add another 120 employees to the original 460 employees and expand the office space. At present, Hermès Textile has a total of 860 employees.


In 2018, sales of the Hermes Group's silk and textiles division increased by 3.2% year-on-year. This result is not really eye-catching, as sales of handbags including Birkin and Kelly increased by 9.4% year-on-year. It seems that Hermès' latest initiatives reflect the Group's optimistic growth potential for silk and textiles in the future. Scarves have always been the star products of Hermes. In recent years, Hermes has been constantly trying to make scarves products more profitable. In 2018, Hermes opened scarves record flash shop in Sanlitun, Beijing, to let more consumers understand Hermes' efforts in the integration of music, art, and fashion. Prior to this, the Hermes Scarf Flash Shop has also opened to Madrid, New York, and Seoul. Silk and textiles are the latest expansion of the Hermes Group's production capacity, and the best-selling leather goods have already begun to expand capacity.


On April 5th, Hermes just announced the opening of a new factory covering an area of 5,800 square meters in the eastern French city of Mulhouse. This is the group's 16th leather workshop, where a total of 260 trained leather experts will make handbags here. Before 2020, Hermès will also open two new leather manufacturing plants, which will employ a total of 800 employees. Behind the Hermès wide-open factory is the performance of the company, the group is quite emboldened. Hermes' latest performance report shows that in 2018, the group's net profit rose 15% year-on-year to 1.4 billion euros, and the group's revenue reached 5.966 billion euros, approaching the 6 billion euro mark.


Hermès is not the only luxury group determined to expand its production capacity.

Bernard Arnault, Chairman and CEO of LVMH Group, said in an annual summary in January that Louis Vuitton's growth was constrained by productivity and announced that four new Louis Vuitton workshops will be opened in 2019, three in France and one in the United States. Texas. An LVMH group spokesperson predicted that Louis Vuitton's new plant will create 1,000 new jobs for France.

In addition, LVMH Group announced in February that it will cooperate with the fashion glasses group Marcolin to open a second factory in Italy. After the factory is put into operation, it will produce 4.5 million pairs of glasses per year for the LVMH Group. More craftsmen are needed to make more products, so Hermes Group and LVMH Group have announced the addition of training courses within the group to train more experienced craftsmen.


Hermès and LVMH Group have expanded their production capacity in response to the current shortage of products. Although many industry insiders began to worry about the possible impact of China's economic slowdown on the luxury industry in the second half of 2018, Dumas said that it did not observe a slowdown in consumer demand. In addition, Daniel Langer, CEO of luxury brand strategy company, told Jing Daily that Sino-US trade friction is a golden opportunity for head luxury brands, and the luxury market is actually more resistant to economic recession than non-luxury markets. . Langer believes that during the economic austerity period, consumers with lower incomes are more affected than wealthy consumers, and luxury consumers think that luxury goods are the eyes of individuality, and will only reduce consumption when they are forced to do so. “Although some brands have slowed down the economy as a reason for the weak performance in the recent quarter, the sales of Louis Vuitton, Gucci and other brands in China are still strong, so only the weak brands will be hit when consumers become picky... if it is a Luxury brands have precise brand positioning, digitize and connect with thousands of young target groups, but now it will be a good opportunity to catch up with opponents," Langer said.