Hermès CEO pledges to cap price increases in light of currency swings
At the brand's annual meeting in France
Axel Dumas, CEO of one of the most iconic luxury French fashion houses – Hermès – has announced plans to cap price increases, in light of swinging currencies worldwide. At the company's annual general meeting at the Palais des Congrès on the outskirts of Paris on Tuesday, Dumas acknowledged that swinging currency rates have created a huge difference in prices for the luxury market between Europe and Asia.
He explained that Hermès has an annual currency hedging policy in place that mitigates the impact of the weak euro on revenues. Dumas also revealed that Hermès strongly believes that its prices should reflect production costs, particularly in France, where the iconic Birkin bag is made.
"That is the reason why we don't apply the solution of saying, 'I lower the prices somewhere and I raise them in France,' because it would artificially increase prices for our French customers," he said at the meeting.
"Faced with [the weakness of the euro] we will probably make some adjustments, but I would say they are in line with our price policy, since we will have a price increase of around 4 percent in 2015, namely in Switzerland," he added, explaining that the luxury goods brand was also considering more widespread price increases for 2016.