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Hermès Ups Prices in US to Counter Tariffs
Luxury giant Hermès announced it will increase prices in the US to offset the impact of tariffs imposed by the Trump administration. This move comes as the company reported a 7% rise in global sales for the first quarter of 2025, though slightly below analyst projections.
The price hike in the US will be in addition to a planned global increase of 6% to 7% already slated for this year. Hermès CFO Eric du Halgouët confirmed the plan, stating the company will fully offset the new duties by raising prices across all US business lines starting May 1st.
While the company saw softer demand in China and lower revenue in segments like perfumes and watches, its core business with high-end clientele remained strong. This resilience among wealthy shoppers allows Hermès to confidently pass on increased costs through higher prices.
Hermès remains committed to its current production locations, dismissing any possibility of relocating manufacturing. This stance, typical of luxury brands prioritizing “Made in France” or “Made in Italy” labeling, leaves few options other than price adjustments to counter tariffs.
The luxury market has seen significant price increases in recent years, impacting even the most affluent shoppers. While brands like Hermès have traditionally relied on pricing power, the current economic climate and repeated price hikes could further dampen demand.
Industry experts warn that price increases are reaching a limit, potentially affecting sales volume. It remains to be seen how these escalating prices will impact the luxury market in the long run.