Are we headed for a price increase?
All eyes are on Hermès’ bottom line: are we due for another price increase? Despite what you may hear from other places and regarding other designers, an Hermès price increase is not at all predictable or straightforward. Although (at least in the US) prices go up either sequentially through January or at the end of January/beginning of February, sometimes the increases are minimal, sometimes substantial, sometimes not at all (in fact I recall a few times when scarf prices actually decreased).
As it stands now, EU prices have gone up, but they appear to be minimal, anywhere from 1-3% ; 90cm scarves went from €375 to €385, GM shawls from €950 to €965, Twillys from €150 to €160. Some bags have increased (Bolide 31 up €250), some have not (Trim duo 24 unchanged). Likewise, UK increases have been minimal, with SLG prices increasing anywhere from £5 to £30 depending on the item.
In Asia, prices have gone up quite a bit further. Following the late 2020 price increases of about 3% in China, prices in in Australia and Singapore have followed suit, with increases of around 3-5% across the board (although some bag prices in Singapore actually decreased).
Are we going to be paying more due to international tariffs?
All this is happening at the same time as we are hearing about impending US import tariffs of 25% on certain items from France (cosmetics and handbags). These were scheduled to take effect on January 6 but were postponed. Although as of this writing the imposition of these tariffs has been put on hold indefinitely, I wanted to let you know what they entailed, in case this should wind up taking effect sometime in the future.
I have taken a look at the United States International Trade Commission Rulings and Harmonized Tariff Schedule regarding handbag imports. It seems that while the headline number for the tariffs were a whopping 25%, in actuality, it varied from 3.7% (for exotic SLGs made of reptile) to 9% (most regular leather bags). The relevant sections were as follows:
Section VIII, Chapter 42: Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut
4202.21.30 This section would affect exotic bags made of reptile skins, such as crocodile, alligator and lizard.
Tariff Rate: 5.3%
4202.21.90 This would apply to most Hermès bags.
Tariff Rate: 9%
4202.22.45. This may apply to certain bags, such as the cotton totes.
Tariff Rate: 6.3%
4202.22.60. This may apply to certain bags.
Tariff Rate: 5.7%
4202.31.30. Exotic SLGs.
Tariff Rate: 3.7%
4202.31.60. Leather SLGs.
Tariff Rate: 8%
To Summarize
So, according to the schedule, even if the import tariffs were to go into effect, it wouldn’t be anywhere near the supposed 25% rate. Although 9% (the maximum relevant rate) on an $8,000 item would be an additional $720 – not an insignificant amount – that’s far less than the $2,000 a 25% tariff would impose. Of course, one would presume that this additional cost would surely have priced some customers out of the market, but that’s never seemed to be a concern of Hermès corporate – and robust reseller sales, sustained over the past 15-20 years, tells us that there are plenty of customers who are still willing to pay more.
Will US Hermès prices rise along with the rest of the world? Will the indefinitely suspended import tariffs also be imposed on top of that? Stay tuned…
Great read for Hermès lovers as always! Thanks!!
Thank you!!! ?
see..yall let them cheat the elections. Everything will increase !!
Please keep politics out of this.
Trump lost. Get a life.
???
This “ain’t” the platform for your ignorance…move on, “y’all”. ?
You are literally an idiot. Your cult leader was the one who decided on this lmao
The tariff was put in place by the Trump administration last year. So anything that increases as a result of it is thanks to the Trump administration. The only reason it is currently being paused and may possibly not get enacted at all is *because* Trump lost the election. If you don’t want the tariff, you should be very happy he lost.
It was put in place because France went after the USA, not the other way around. Trump responded in kind with the threat of this tariff to combat the French tariff on US goods. However, last week, the tariff was suspended b/c French are willing to talk, finally. Worth a bit of research before just pervasively blaming Trump for every single thing that goes wrong in the universe. Not that he isn’t to blame for much of it, but not this.
When you say went after, you mean they rightfully decided to collect
tax on the US big techs that are making a profit on their citizens?
As I said, “in kind”. But it’s irrelevant now, isn’t it? It’s off the table as of last week.
I actually don’t have a side in this – I am not even American (I’m your northern neighbor). I replied because the person made a comment that made it sounds like this tariff is a result of the *new administration* who are not even in office and was bewildered that was the logic they seemed to be suggesting. I think it’s perfectly fine to use tariffs to help protect your own country, for both sides, and don’t really know if either one is like “wrong” for doing it (although I do think tech vs luxury industry actually don’t align to same types of customers, but I’m no trade expert). I just wanted to highlight that logic.
which means buy more American products instead of overpriced foreign luxury goods aint it?
lol right. If people truly cared, they’d already be not buying these goods at all, and many of the luxury shoppers, esp. for the tier of Hermes customers, fly regularly and shop in multiple countries. All I’ve seen is that they are now saying that they will save their shopping when they fly to France and take advantage of the lower prices if the price increases another 25% in the US.
They either
1) are rich enough they won’t even care
2) will think the increase is too big and actually go spend the money overseas.
I don’t think either leads to buying more American products. It’s because American has no equivalent brands. Luxury shoppers aren’t shopping for a handbag, they are specifically shopping for the luxury handbag. If they are just looking for a handbag they wouldn’t be shopping Hermes in the first place.
Tariffs were suspended last week. Not happening. So this is a non-issue right now.
https://www.thefashionlaw.com/u-s-walks-back-on-25-percent-tariff-slated-to-apply-to-1-3-billion-in-french-handbags-cosmetics/
I published a version of Bari’s post in which she had not yet addressed this, my fault. The article is now updated!
Thanks so much, Vlad!
No worries! It’s kind of some good news right now, at least. Not that any of the companies really care. They already whet public narrative with this, so when Chanel & LV increases came last week, people expected it, DESPITE Chanel no longer being a French-based company (UK) & Italy producing probably more than 95% of RTW & leather goods. LV is 50% produced in USA now. It’s like the fuel surcharge that never was reversed when gas prices plummeted. It made sense at the time, people accepted it, so it stuck.
I went out and bought a new Hermes bag two weeks ago “just in case” any price increases or tariffs hit. The best excuse ever to get a new bag.
I just bought a new Hermès belt this week: Rythme buckle with black/gold strap.
?? Hermès ??
There’s an entire (sub)section on the US Tariff Schedule for Hermès products…. My respect for the brand increased so much!
Ok by me since I couldn’t afford them before the price increase anyway!! ?
People who can afford Hermes are not going to worry about this price increase anyway
I will be curious to see what possible increases there are for any of the quota bags. In 2020 things seemingly didn’t change much. My first quota bag of the year was purchased in early 2020 and was the same price as 2019, the second was only $100 more which was purchased in July, and the final was the same as 2019. So this certainly begs the question as to whether Hermes is going to bring prices up. They certainly seem to do things pretty slowly and don’t hit hard like Chanel. My hope is that we don’t see anything above 5%.
What do you mean by “quota bags”?
Quota bags are either a Birkin or a Kelly.