Hermes Crosses $200 Billion

French luxury goods company, Hermes International, known for its iconic Birkin and Kelly handbags, has surpassed a market value of EUR200 billion ($218 billion), becoming more valuable than Swiss drugmaker Novartis AG.

The company's shares have been rallying along with other luxury brands as investors view the sector as resistant to economic downturns, particularly in light of China's post-Covid recovery, which has revived demand for high-end designer products.

Hermes shares are up about 30% in 2023, and it's now the eighth most valuable company in the pan-European Stoxx 600 index. It is second in the luxury space only to France's LVMH, or to give it its full name, Moet Hennessy Louis Vuitton SE.

Some analysts consider Hermes to be in a league of its own in terms of pricing power, with demand for its handbags consistently surpassing its production capacity, despite starting price tags of $8 000 or more for the most popular models. As part of plans to boost output, the company is set to open a new leather manufacturing plant in Normandy.

The brand is worth more than the combined value of several French companies in different industries, including Airbus, Renault, Vivendi, Carrefour, Societe Generale, and Orange.