Hermès Implements U.S. Price Increases Amid Tariff Challenges
French luxury house Hermès will raise prices across all product categories in the U.S. starting May 1, 2025, in response to the 10% import tariffs introduced by the Trump administration. The move is aimed at fully offsetting the impact of the new duties.
“We will increase the sales prices across all business lines in the USA starting May 1 to fully offset the impact of these new tariffs,” said Eric du Halgouët, Hermès’ Chief Financial Officer.
Price hikes will affect most major categories, including handbags, women’s ready-to-wear, scarves, jewelry, watches, silks, and accessories. Analysts from Bernstein noted that increases are averaging 4–5 percent, with some products seeing slightly higher adjustments. Luca Solca, a Bernstein analyst, explained, “These will likely cover for a worst-case scenario of 10 percent tariffs and compensate for the recent weakening of the U.S. dollar against the euro.”
In contrast, more accessible product categories such as home goods, fragrance, and beauty will see minimal increases. “We do not expect Hermès to be completely immune to weakening demand — as its decision to absorb tariffs in perfume and beauty shows,” Solca said, noting the price sensitivity of these segments, which make up just 3.5 percent of the brand’s gross sales.
Despite the macroeconomic headwinds, Hermès continues to show resilient performance. First-quarter 2025 sales grew 7% year-over-year to €4.1 billion, slightly below analyst expectations due to slower growth in China and tariff-related uncertainty.
To meet sustained demand, particularly in leather goods, Hermès plans to build four new factories over the next four years. The expansion follows ongoing supply constraints in the U.S., where the brand had already raised prices by 6–7 percent last year.
Reflecting on Hermès’ position in times of economic uncertainty, CEO Axel Dumas said, “There was a flight to quality. Hermès is the gold standard in a way.”
Solca added, “I think it pays for a brand like Hermès to sit at the very top of consumer desirability. When consumers are more guarded… Hermès is the very last brand they give up on.”
Sales in fragrance and beauty fell slightly to €129 million, while the home and jewelry category grew 6.1 percent to €256 million. Watches, however, declined 10 percent in the quarter, with the average timepiece priced at $10,581.
Overall, the U.S. price increases reflect Hermès’ effort to maintain margins while continuing to prioritize quality and long-term positioning amid changing economic conditions.
