Thursday, August 14, 2008

Hermès Pricing

This week Hermès increased the prices on many of their most popular items while decreasing the prices of others. The prices of many popular bags and accessories were increased 5% to 8% depending on the item. A classic print silk woman's scarf is now $375 when they were $355 August 10th. A 32cm croc Birkin was $35,000 and is now $37,000. Both prices seem insane even to this Madison Avenue gal but going back five years ago the same bag was under $8,000. Can you imagine?



On the bright side, some items on Hermes.com have gone down in price. For instance, a hippo key ring was $350 and is now $320. The globetrotter agenda is now $590, from $640 and mugs (yes, the type you drink with) were $125 and are now $110. Sorry, that's the end of the bright news because there are rumors of an additional 10% price increase sometime after the new year.

Understanding Hermès pricing has never been easy. Back in March 2008, Business Week ran a great article, "The Mystery of the $234 Hermès Tie."The magazine reported that in Moscow a silk tie costs 5,760 rubles, or around $241. That same tie will cost €125 ($192) at the company's flagship store on Paris's Faubourg Saint-Honoré but only $160 before tax ($173.40 after) at their shop on Manhattan's Madison Avenue.

Some would say that the price discrepancy has to do with the euro but given the weak dollar and the strong ruble, the price should be higher in the U.S. and lower in Russia than in Europe. Yet the reverse is true. Here is a great map of Hermès pricing.

If economics and currency arbitrage aren't your thing you might want to consider making your Hermès purchase before 2009.

No comments: