Hermès International, a French high-end manufacturer of fashion, accessories and leather goods, has surpassed Kering’s shares in market capitalisation on the Parisian stock exchange Euronext Paris.
Around noon time on 19 April 2018, Hermès’ share price stood at 518 euros, giving the brand a cap of 54.68 billion euros versus Kering at 431 euros endowing the group a market cap of 54.41 billion euros.
Kering, a global luxury conglomerate, owns mega brands like Gucci, Saint Laurent, Balenciaga, Bottega Veneta among several others. Its largest undertaking Gucci alone outstrips Hermès turnover annually. Speaking in numbers, Gucci’s revenue in 2017 amounted to a whopping 6.2 billion euros in contrast with Hermès’ 5.559 billion euros.
Even so, Hermès’ well-maintained heritage appeal along with star products like its 7,000 euros dressage saddles and the infamous 20,000+ euro Birkin bags keep investors more than confident about its stability.
Analysts believe that the current volatile relationship between US President Donald Trump and China is the reason behind this. Losing the confidence of the Chinese shoppers bears severe bad news for luxury brands.
Luca Solca, a luxury expert at Exane BNP Paribas further explained, “When people are more concerned about the market conditions, an institutional brand like Hermès overperforms. So our expectations for the next couple of quarters are that Hermès will be more stable and resilient, along with LVMH and Brunello Cucinelli.”
It is impertinent to add here that all of France’s main luxury posting have enjoyed an exceptionally cheerful first quarter where Kering grew at the rate of 18%, LVMH at 20%, while Hermès obviously taking the lead at 23%.
