A taste for luxury cheers Hermes

FRENCH LUXURY handbag maker Hermes said it had opened a new manufacturing plant in eastern France, as rivals like LVMH’s Louis Vuitton also expand leather goods production to keep up with thriving Chinese demand.

Hermes, known for its squared silk scarves as well as its handstitched $10,000 (£7,135.72) Kelly or Birkin bags, trades off its ‘Made in France’ appeal and is famed for attracting long waiting lists.

Like luxury peers, Hermes benefited from strong appetite from Asian shoppers in 2017, lifting its sales and profits to record levels.

In the fourth quarter, sales growth slowed slightly from the previous three months, however, as stocks of its handbags ran low.

Hermes, originally a saddle and equestrian equipment maker, said its 16th leather goods workshop, located in the country not far from the city of Mulhouse, would eventually house 260 specialists trained to hand-craft a bag from start to finish.

Vuitton is also expanding its leather goods production with at least two new domestic workshops this year and next.

Hermes has tended to pick sites in rural areas for its plants, hiring locally and training staff-in house, for workshops of around 300 people maximum.

Hermes also plans two more production sites in France by 2020, and currently employs 3,310 leather goods workers.