Hermes boosts Kelly bag output with new Normandy facility

HERMES inaugurated a leather-goods manufacturing facility in Normandy as the luxury brand seeks to meet rising demand for Kelly and Constance handbags.

The facility in the town of Louviers has 140 leather workers and aims to double that within four years to produce bags, saddles and small leather goods. The facility in Louviers is making 7,700 euros (S$11,177.4) Kelly bags in 25 centimetre size and will eventually churn out another model called Constance mini. One Kelly bag takes between 14 and 20 hours to be made and is produced by a single leather-worker.

Hermes aims to grow its volumes of leather goods by about 7 per cent a year, adding about one leather plant a year, executive chairman Axel Dumas told reporters on Friday (Apr 7). The luxury-goods company’s production increase is limited by the need for savoir-faire.

“Training takes time,” Dumas said. “We take our best artisans, and they become trainers so they’re no longer in production.” That’s why one opening a year is “optimal not to disrupt what we do while still growing.”

Hermes has 21 leather manufacturing plants across France. The Louviers facility spreads over 6,200 square metres (67,000 square feet) and was conceived by the architect Lina Ghotmeh. Hermes has another leather manufacturing site as well as a fragrance plant in the region of Normandy. About a quarter of the company’s almost 20,000 workers globally are leather-goods artisans.

This week, Hermes crossed the 200 billion-euro valuation milestone as investors rush to buy luxury names they see as resilient to inflation pressures on consumers’ budgets. Luxury stocks have so far been relatively unscathed by the market volatility with Hermes shares rising 30 per cent so far this year.

Some analysts consider Hermes to be in a category of its own as far as pricing power is concerned. Demand for its handbags typically surpasses its production capacity. Many bags also enjoy a higher resale value. Hermes reports first-quarter sales on Apr 14.

While all of its bags are made in the company’s home market, the label’s watches are manufactured in Switzerland and the company also has some shoe manufacturing activities in Italy. BLOOMBERG