Hermes to pass on tariff costs to US customers

PARIS: France's Hermes will fully shift the burden of tariffs in the United States to its wealthy clientele, the company said yesterday, as it posted first-quarter sales that slightly missed market expectations in a sign of slower weakness.

- MIMOSA SPENCER TASSILO HUMMEL

Hermes's first-quarter sales were dragged down by a continued lull in China, but were still better than peers.

At the start of the week, sector bellwether LVMH reported a 2% sales drop in its all-important fashion and leather division and Hermes took its place as the world's most valuable luxury group by market cap.

The family-controlled Hermes adapts to the trade war unleashed by US President Donald Trump's tariffs, it is banking on its pricing power as one of the most exclusive luxury brands to sell a premium to all products sold in the United States.

That will be on top of regular price adjustments that were around 6%-7% this year.

"We are going to fully offset the impact of these new duties by increasing our selling prices in the United States from May 1, across all our business lines," said Finance Chief Eric du Halgouet. The company flagged possible retail-related price hikes in February.