Hermes Breeds own Crocs to Meet Bag Demand

Hermes Breeds own Crocs to Meet Bag Demand
June 10th, 2009 / Posted in Hermes Handbags, In The News by Megs Mahoney Dusil.

The economy may be hurting world wide, but those that love Hermes are still buying. In fact, Hermes has resorted to breeding its own crocodiles on farms in Australia to meet the demand for its exotic bags. It is reported that Hermes makes around 3,000 crocodile bags every year and demand continues to grow while the crocodiles are not readily available to fill orders. It can take three to four crocodiles to make one Hermes bag, so the move to use their own farms makes sense.
While other brands are hurting, Hermes continues to churn sales increases. Along with their own crocodile farms in Australia, Hermes is also hiring an additional 50-100 leather workers to join the staff of 2,000 in Paris. What does this mean for us? An easier change to purchase a Hermes crocodile bag, if we have the funds to do so.
[Story via Reuters]
PARIS (Reuters) – French luxury goods group Hermes has resorted to breeding its own crocodiles on farms in Australia to try to meet demand for its leather bags, its chief executive said on Monday.
Customers sometimes have to wait several years for certain exotic-skin bags, which can fetch over 35,000 euros ($48,410).
“It can take three to four crocodiles to make one of our bags so we are now breeding our own crocodiles on our own farms, mainly in Australia,” Patrick Thomas told the Reuters Global Luxury Summit in Paris.
Hermes already faces a major challenge producing 3,000 crocodile bags a year, Thomas said, adding: “The world is not full of crocodiles, except the stock exchange!”
Crocodile farming can be expensive, with the reptiles having to be kept apart in separate rooms to protect their skins from bites, but even so allowances have to be made for natural losses that can amount to around a third of bred crocodiles.
Hermes’ leather goods, which account for 40 percent of its business, have been the most robust in the current downturn with the group taking on 50-100 leather workers this year to add to the 2,000 craftsmen it already employs at French sites.
Thomas admits the group has been pushing other areas of the business, such as fashion and textiles, so it is not so reliant on leather bags, but says this area continues to be its fastest-growing product line.
“We cannot face demand. We have massive over-demand. We are limited by our ability to train new craftsmen,” he added.

Hermes First Quarter 2009 Sales INCREASE

Surprisingly, or maybe not, Hermes posts first quarter sales increase.
May 26th, 2009 / Posted in Hermes Handbags, In The News by Amanda Mull.
I can’t decide if this news is counter-intuitive or not, but Forbes is reporting that Hermes will post an increase in sales during the first quarter of 2009, a time when many retailers and brands were feeling a big-time sales crunch. Why is that?
Well, the sales increase isn’t worldwide. Sales fell modestly in Europe and experienced a double-digit decline in luxury-goods-obsessed Japan, but the brand saw increases large enough in non-Japanese Asia to more than make up for decreases elsewhere. The increases were seen mostly in South Korea and China, which many industry watchers regard as somewhat of a Last Frontier of luxury retail.
So what does this tell us? First of all, we should all remember that signs of strength in the global economy probably mean good things for those of us in America. Our economy is incredibly interconnected with those of other nations, particularly China, and we can’t start to make a significant recovery without signs that are trading partners are also ready to move forward economically. Sales increases of luxury goods mean that consumers in other countries feel confident in the direction in which the economy is headed, and maybe a little bit of that consumer confidence will rub off on other markets. Lastly, it’s a good reminder to all businesses that there are still markets out there that are spending money. Finding them may be a challenge, but it can and will be done. So congratulations, Hermes, on a game well played.
Article via Forbes.com

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