Hermes sticks with plan to raise output even as war sours mood

Hermes opened a 25th leather-goods plant in France, pushing ahead with plans to increase production despite a luxury demand slowdown and fresh uncertainty induced by the Iran war.

Hermes' top brass, led by executive chairman Axel Dumas, inaugurated the plant in Loupes, near Bordeaux on Friday in the presence of local authorities. The site is currently making mostly Kelly handbags and will increase production of the Constance and Bride de Jour.

"The Kelly is the most complex model to produce so it makes for a good training basis for newly recruited artisans to expand their skill set," said Guillaume de Seynes, executive vice-president for the manufacturing division and equity investments.


The company's leather-goods plants - which make bags, belts and wallets - are all in France and typically employ about 260 artisans.

Also read | Porsche loses speed on a curvy road

The workers go through an 18-month training program before potentially getting a permanent position. A good artisan generally becomes fully autonomous within five years. Hermes' leather shoes tend to be produced in Italy.

Hermes reports first-quarter sales on April 15, two days after LVMH, the world's largest luxury group. Shares of Hermes and its peers have lost ground since the start of the year as the war in the Middle East threatens consumer demand globally.