Hermes's deficit model is starting to falter. Photo: CHi Lok TSANG/Unsplash
16.03.2026 990

Hermes's deficit model is starting to falter.

French fashion house Hermès' strategy of producing fewer items than demand, thereby fueling interest in its products, is backfiring. Prices for Birkin and Kelly bags have dropped on the secondary market, reports Laconceria.it.

Of course, no one is calling this a crisis, as Hermès' revenue has grown by 38% over the past three years, while LVMH's revenue has grown by only 2%, and Kering's sales have fallen by 28%. But the brand's growth could slow.

Today, Hermès products are more common on the streets and on social media than they once were. The brand is losing its exclusivity. This is confirmed by surveys conducted by the Swiss financial holding company UBS in China. In a 2024 UBS study, 29% of respondents named Hermès as one of their favorite brands; in 2025, this share dropped to 22%.

French fashion house Hermès' strategy of producing items below demand, thereby fueling interest in its products, is failing. It's been noted that prices for Birkin and Kelly bags…
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