Dive Brief:
- Hermès is preparing to raise prices in the U.S. to offset the impact of tariffs on imports from the European Union, according to an earnings call Thursday.
- The France-based luxury house will increase the prices beginning May 1, which Eric du Halgouët, executive vice president of finance, said will compensate for the gross effects of an extra 10% tariff rate applicable to the EU.
- Hermès doesn’t plan to increase prices in any other region, du Halgouët said.
Dive Insight:
Hermès first noted that it would raise prices in the face of tariffs during its last earnings call in February. At the time, Executive Chairman Axel Dumas said he expected American customers to remain loyal despite increased prices.
Consumer loyalty remains a key part of Hermès’ strategy, and during Thursday’s call, du Halgouët said this factor was especially crucial “in these uncertain times.”
Hermès produces about 75% of its products in France, but it sells all over the world.
Price increases will be applied across business lines, du Halgouët said Thursday. The exact price changes set for next month are still being calculated, because the exact tariff levels haven’t been set in stone.
“We remain cautious because we know that these announcements have a huge impact on the financial markets and [an] impact also on the dollar,” du Halgouët said.
