As of the end of June 2023, French luxury goods company Herm è s recorded a comprehensive income of 6.698 billion euros (approximately 52.936 billion yuan) in the first half of 2023, a year-on-year increase of 29% at fixed exchange rates.
During the reporting period, all business lines under Herm è s achieved double-digit growth. Among them, Herm è s Watch Division achieved a year-on-year increase of 24.3% in sales to 317 million euros (approximately 2.505 billion yuan). The company stated, “Whether it is a complex function watch or a classic watch, it has achieved extraordinary performance during the reporting period.”
If this growth rate continues to be maintained in the next two years, Herm è s Watch can exceed a revenue scale of 600 million euros in 2023, and may approach or reach a scale of 1 billion euros by 2025. As of the end of 2022, there were only 7 watch brands in the global watchmaking industry with sales close to or exceeding 1 billion euros (approximately 961 million Swiss francs), namely Rolex, Cartier, Omega, Airbnb, Patek Philippe, Richard Mills, and Longines.
Herm è s has a track record of maintaining this growth trend. Herm è s’ outstanding performance in the watchmaking market over the past three years has demonstrated that the brand’s adjusted watch business strategy is effective and has sustainable growth potential.
In recent years, Herm è s has significantly changed the market positioning of its watch products, shifting from a strategy of using watches as accessories to attract customers, to a high-end product line that showcases brand quality and craftsmanship, similar to classic products such as Herm è s leather goods and scarves. Herm è s has reorganized its watch product line and launched a new H08 luxury sports watch series, showcasing advanced watchmaking techniques and other new watch works.
With the adjustment of strategy, the pricing of various watch series under Herm è s has also been more clearly differentiated. According to Morgan Stanley, an investment bank, in the sixth edition (2022) of Swiss watches, Herm è s premium watches have an average price of 300000 euros (approximately 2.3659 million yuan) and an annual production of only about 100 pieces.
At the same time, Herm è s has discontinued most entry-level watches and instead launched more iconic works around some classic collections. For example, the Cape Cod series, Heure H series, and Arceau series women’s watches, as well as the Herm è s H08, Arceau, Carr é H, and Slim series men’s watches. The pricing of these classic products now starts at 2100 euros, while 10 years ago, consumers could buy an Herm è s watch for at least 900 euros.
