Fan: Birkin bags are a favorite of celebrities like Victoria Beckham (pictured)
Hermes has overtaken L’Oréal for the first time to become France’s second most valuable company.
On a day of mixed fortunes for the two French giants, shares in the Birkin bag maker rose 4.8 percent to a record high on the Paris stock exchange. L’Oréal fell 7.6 percent.
That left Hermes valued at £196 billion, while L’Oreal is worth £192 billion. Both trail Louis Vuitton and Chanel owner LVMH, which is worth £345bn.
The share price changes came after Hermes revealed that sales in the three months to the end of December reached £2.9bn, up 17.5 per cent on the same period a year earlier.
It came amid growing demand for Hermes products, including the Birkin bag, which can cost £70,000. By contrast, L’Oreal, the world’s biggest beauty firm, said sales rose just 2.8 per cent in the final quarter of 2023 to £9 billion.
The firm cited “a challenging environment of geopolitical tensions, inflationary pressures and a stagnant beauty market in China.” When investors gave a response that was as swift as it was brutal, analysts at investment bank JP Morgan said: “Hermes is playing in a different league.”
Hermes said it saw “solid momentum” across its business in 2023 as it bucked the bearish trend felt by other fashion brands. The company’s Birkin bags are a favorite of celebrities like Victoria Beckham.
British actress Jane Birkin, who died aged 76 last year, inspired her signature leather bag after complaining to then-Hermes boss Jean-Louis Dumas in 1981 that she needed a larger bag for traveling while traveling. I sat next to him on a plane.
Hermes will increase its prices by 8 to 9 percent this year as it does not expect its wealthy customers to be deterred by the increases.