The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
PARIS, France — French luxury handbag maker Hermès said on Friday 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.
Hermès, known for its squared silk scarves as well as its hand-stitched $10,000 Kelly or Birkin bags, trades off its "Made in France" appeal and is famed for attracting long waiting lists.
Like luxury peers, Hermès 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.
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Hermès, 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.
Hermès 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.
Hermès also plans two more production sites in France by 2020, and currently employs around 3,310 leather goods workers making everything from saddles to wallets.
France's manufacturing sector has seen a burst of renewed job creation recently, after almost two decades of rapid de-industrialisation.
The industrial sector saw its first net job creation since 2001 in the last three months of 2017, national statistics showed last month.
By Sarah White; editor: Susan Fenton.
The group’s flagship Prada brand grew more slowly but remained resilient in the face of a sector-wide slowdown, with retail sales up 7 percent.
The guidance was issued as the French group released first-quarter sales that confirmed forecasts for a slowdown. Weak demand in China and poor performance at flagship Gucci are weighing on the group.
Consumers face less, not more, choice if handbag brands can't scale up to compete with LVMH, argues Andrea Felsted.
As the French luxury group attempts to get back on track, investors, former insiders and industry observers say the group needs a far more drastic overhaul than it has planned, reports Bloomberg.