While Luxury Industry Struggles, Hermès Sales Surge with Birkins and Kellys

In 2025, many of the biggest luxury houses are grappling with price fatigue, tariff backlash, and slipping consumer confidence. And this has translated into slowing sales. However Hermès is proving resilient. In its second-quarter earnings, Hermès reported a 9% year‑on‑year revenue increase (€3.9 billion, roughly US$4.5 billion), largely powered by its leather goods division—most notably the coveted Birkin and Kelly handbags.

The company also boosted U.S. prices by an additional ~5% beyond global increases, in part to offset US/EU tariff effects. Importantly, Hermès has indicated that, after a major global price hike in May 2025, no further increases are planned this year.

Price Increases and Tariff Pressures Across Luxury Leather Goods

Hermès’ pricing moves reflect a larger pattern in the industry: rising costs, trade policy shifts, and currency fluctuations are feeding price increases in handbags and accessories. For instance, Chanel’s Classic Flap bags also saw a 4–5% price increase in August 2025, with all sizes up by US$500; Minis elevated to ~$5,200–$5,400, and mediums now retail around US$11,300 in the U.S.

Louis Vuitton has similarly increased prices — the Neverfull GM in monogram canvas, among other icons, rose by about 3.6–4.8% depending on style and market. 

Where Growth Is Coming From Within Hermès

• Leather goods are surging: Birkins and Kellys continue being treated as blue‑chip assets that hold both prestige and financial value. 

• U.S. demand is especially strong: Hermès’ sales in North America rose ~12.3% year‑over‑year.

• Lower tiers of the Hermès business, such as silk accessories and beauty products, did not fare as well (declining ~4%), highlighting a polarization: high‑end bags and “exclusivity premium” items carry luxury brands through turbulent periods. 

What This Means for Resale and Collectors Right Now

• Icon handbags like Birkin/Kelly are increasing in both retail and resale value, given limited supply, rising costs, and consumers shifting away from less iconic items.

• When major houses like Chanel and Hermès hike prices, resale prices for classic models often “catch up” (especially for ones in pristine/excellent condition). Buyers who purchased before the hikes may see their bags appreciating in value. And for those looking to sell, now could be a great time to capitalize on those favorable profit margins.

• Some lesser categories (smaller leather goods, accessories) are more vulnerable: wider supply, less prestige, so resale premiums tend to lag.

Risks, Watch‑outs & Outlook for the Rest of 2025

• Consumer pushback: there’s evidence of falling demand among aspirational consumers who can’t absorb frequent price increases.

• Tariffs remain a wild card, especially in the U.S. import environment. Brands may raise U.S. prices disproportionately to protect margins.

• Brand prestige depends heavily on maintaining scarcity; over‑production or perceived dilution can weaken resale value long term.

Given its strong performance despite greater luxury struggles, Hermès has once again solidified itself as a leading force in the luxury industry.