On April 25th, Herm è s announced its Q1 2024 performance report. Selling expenses increased by 12.6% year-on-year to 3.805 billion euros (approximately 29.581 billion yuan), an increase of 17% based on fixed exchange rates. In comparison, Herm è s Group increased by 22.3% year-on-year in the first quarter of 2023 and by 18% in the fourth quarter.

By category, the sales expenses of leather goods and saddle goods increased by 15.5% year-on-year in the first quarter to 1.628 billion euros, accounting for the largest proportion of total sales expenses. The sales expenses of tailors and accessories increased by 11.7% to 1061 million euros, while silk fabrics and perfume cosmetics increased by 3.4% and 3% to 242 million euros and 130 million euros, respectively. The watch section only increased by 0.1% to 166 million euros.
From a regional perspective, the sales volume of European shopping malls increased by 13.9% year-on-year to 757 million euros, with French shopping malls increasing by 14.3% to 312 million euros. Herm è s recorded a 10.3% increase in several luxury goods affected stores in the Americas. The sales volume of Asia Pacific shopping malls increased by 9.2% year-on-year to 2.277 billion euros.
Specifically, the sales volume of Japanese shopping malls increased by 10.8% year-on-year to 357 million euros, while Asia Pacific shopping malls outside of Japan increased by 8.9% to 1.92 billion euros. It is worth mentioning that in the same period of 2023, expenditures in Asia, excluding Japan, increased by 23% in the quarter, mainly benefiting from strong demand in Chinese shopping malls, while the growth rate in Japanese shopping malls was also 26%.
Similarly, in the first quarter of 2024, LVMH’s group sales expenses increased by 2% year-on-year to 20.7 billion euros, with a 2% increase in historical and leather goods at locations such as Louis Vuitton and Dior, and a 5% increase in jewelry and watches covering Bulgari and Tiffany. The sales expenses of Zheyun Group increased by 11% year-on-year to 4.504 billion euros, with Gucci’s expenses increasing by 21%.
It has become a reality for luxury shopping malls to encounter coldness, and even Herm è s has no choice but to prevent the growth of sales from narrowing. In the luxury goods industry today, luxury brands are no longer seeking explosive growth, but rather competing to determine who has the most stable growth trend, who has the most loyal customers, and who can explore opportunities from a more segmented perspective.
There are roughly three brands that can still maintain growth in the luxury goods industry today.
One type is a brand represented by Herm è s, which targets high net worth individuals. Its customer base is relatively less affected by economic changes, and the scarcity of its products brings higher social position costs. Even for middle-class consumers, purchasing beginner products from such brands often leads to better resale value.
Another type is luxury brands that delve deeply into specific categories.
For example, Moncler, which dominates the luxury down jacket category, saw a 17% year-on-year increase in expenses in the first quarter of 2024 to 705 million euros. Just like Brunello Cucinelli, it is one of the few luxury brands with a larger scope in the exclusive cashmere category, and also has the attribute of targeting high net worth individuals, resulting in a 16.5% increase in sales in the first quarter.
Another type is a brand that provides consumers with the cost of refurbishment.
Miu Miu’s sales increased by 89% year-on-year in the first quarter, while it has already increased by 58% in 2023. Miu Miu is definitely not a luxury brand that preserves value, as it does not delve into specific categories or primarily target high net worth individuals. It has turned red again in recent years thanks to its bold plan to absorb eyeballs.
In recent years, consumers have been increasingly dissatisfied with the continuous price drops, conservative plans, and dull marketing of large luxury brands. In the current market where consumers are constantly paying attention to exemplary and value preserving products, Miu Miu provides consumers with a channel to satisfy their negative emotions. Moreover, choosing products that do not preserve value is also another form of confirming social position.
The continuous and stable increase of these three categories of luxury brands may have a negative impact on the operation of conservative top luxury brands. Seeking a larger and more comprehensive approach was a trend during the rapid growth of the luxury goods industry in the past decade. Many luxury brands hope to strengthen their leadership positions by widely incorporating various perspectives, but it is also difficult to prevent the danger of cost concentration.
With the increasing cycle of luxury goods sales coming to an end, previously proven useful forms may find it difficult to bring sufficient profits now. But no matter which category luxury brands choose to stop growing, the same key message behind it is that the period of luxury brands competing to participate in popular culture in the past has gradually come to an end, replaced by a period of exaggeration to satisfy private interests and aesthetics.

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