Fan: Birkin bags are a favourite of celebrities such as Victoria Beckham (pictured)
Hermes has overtaken L’Oreal for the first time to become the second most-valuable company in France.
On a day of mixed fortunes for the two Gallic giants, the Birkin bag maker’s shares rose 4.8 per cent to a record high on the stock market in Paris. L’Oreal fell 7.6 per cent.
That left Hermes valued at £196billion while L’Oreal is worth £192billion. Both lag behind Louis Vuitton and Chanel owner LVMH, which has a value of £345billion.
The share price swings came after Hermes revealed sales in the three months to the end of December hit £2.9billion – up 17.5 per cent on the same period a year earlier.
It came amid booming demand for Hermes products including the Birkin bag which can cost £70,000. By contrast, L’Oreal, the world’s largest beauty firm, said sales rose by just 2.8 per cent in the final quarter of 2023 to £9billion.
The firm cited ‘a challenging environment of geopolitical tensions, inflationary pressures, and a stagnating beauty market in China’. As investors gave a response that was as swift as it was brutal, analysts at investment bank JP Morgan said: ‘Hermes is playing in a different league.’
Hermes said it saw ‘solid momentum’ across its business in 2023 as it bucked the downbeat trend felt by other fashion firms. The company’s Birkin bags are a favourite of celebrities such as Victoria Beckham.
British actress Jane Birkin, who died aged 76 last year, inspired its signature leather bag after complaining to Hermes’ then boss Jean-Louis Dumas in 1981 that she needed a bigger bag for travelling as she sat next to him on a plane.
Hermes will hike its prices between 8 per cent and 9 per cent this year as it does not expect its wealthy customers to be deterred by the increases.