Axel Dumas inaugurated a new Hermès leather goods store on Friday April 7 in Louviers (Eure), near Rouen. The manager of the luxury group welcomed the opening of this 21e French workshop dedicated to the manufacture of leather goods and riding saddles. “Eight years ago, here, it was desolation”, recalled François-Xavier Priollaud, mayor (MoDem) of Louviers. The Hermès leather goods factory occupies a former site built in 1957 by Philips for the manufacture of vinyl records and then CDs. The closure of this factory in the mid-2010s led to the loss of 700 jobs.
Hermès, which bought five of the twelve hectares of this industrial wasteland located in the heart of the city, invested in the construction of this 6,200 square meter building “without resorting to subsidies”, greeted Hervé Morin, president (Les Centristes) of the Normandy region, during the inauguration ceremony. For the time being, Hermès employs 170 people there. As training is provided at the Normandy site of its Skills School, the workforce will grow, eventually reaching 260 people.
The opening of this leather goods store will not be enough to quickly put an end to Hermès’ supply problems. The group is, however, working hard to increase its capacities. Over the past three years, the brand has opened ten leather goods stores. In 2022, 192 million euros were devoted to it. Two other inaugurations are planned for this spring, in Tournes (Ardennes), in May, and in Saint-Junien (Haute-Vienne), in June. Three others are under construction, in Riom (Puy-de-Dôme), for an opening in 2024, in L’Isle-d’Espagnac (Charente), for 2025, and in Loupes (Gironde), for 2026.
No calm in sight
But, according to its leaders, Hermès will not be able to reduce its stock-outs of bags in stores anytime soon. Because, despite stratospheric prices – count 6,500 euros for a Constance shoulder bag – demand remains very high in its three hundred stores. For several years, the sales volumes of leather articles have been growing by around 7% per year. In 2022, sales of Hermès leather goods, including bags, increased by 16% in value, taking price increases into account. They reached 4.9 billion euros, or almost half of its activity.
And nothing suggests a lull within the group, whose sales increased by 23% in 2022. Because, following a surge in the group’s turnover with the Americans, last year, thanks to a strong dollar, the return to normal of the Chinese market and the revival of Asian tourism suggest a new rebound in bag sales in 2023. In Paris, in particular, nationals of Asian countries will soon be back in stores.
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