The luxury segment rediscovers America. During the first 3 months of 2022, the US market showed great dynamism, attracting investments from luxury brands that see China slowing due to the zero-Covid policies and various lockdowns such as the one in Shanghai. It’s not by chance that the US are becoming the main growth market for Hermès and Brunello Cucinelli, as shown by the financial results (and investments) of both brands during the January-March period.
The luxury segment rediscovers America: Hermès +44%
Hermès increased sales, for the aforementioned period, by 44% in North America (at constant rates). It is the best performance for the brand around the globe, with Europe (without France) close at +43.9%. Overall, the luxury brand has stated that revenue at constant rates were up 27% to 2.76 billion euro, nearly double the amount forecasted by analysts (+15%). The Leather Goods and Saddlery division (which amounts to about half of the annual sales) recorded a 15.8% increase, well below the +44% of ready-to-wear and accessories. This highlights that, in this quarter as well (after the last of 2021), the brand’s self-imposed limitations on production of luxury handbags have stopped Hermès from satisfying demand. Regardless, the brand announced that two additional leather goods’ laboratories will be open in 2025 and 2026, as well as 3 more to come. Of the three, one will open every year from now to 2024.
The US flag also brought good news to the first quarter data of Cucinelli. US-based sales of the brand increased by 37.7%: more than double the increases for the rest of the world. The Umbria-based company closed the first three months of the year with 196.9 million euro in sales. This is equal to +19.6% at current rates on 2021 and +22.8% on 2019. “Successful sellouts during spring and the important collection of orders for both Men and Women collections for Fall-Winter 2022 lead us to believe that our goal to grow by 12% for the year (and by +10% in 2023) can be reached”, says Brunello Cucinelli. The company claimed to have no issues in sourcing raw materials. As their “purchases for the next collections aren’t encountering issues, given that we buy our exclusive materials in advance.”