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Hermès makes and sells luxury handbags, silk scarves, leather goods, and fashion, mostly to wealthy customers around the world.
Hermès is a luxury goods maker, and it sells things people use to signal taste and status: handbags, silk scarves, leather goods, watches, perfume, and ready-to-wear clothing. Its most famous product is the Birkin bag, a purse that can cost more than a car and that customers often cannot simply walk in and buy. The brand's history is rooted in horse harnesses and saddlery, and that origin still shapes how its leather workshops feel: small, careful, and staffed by artisans who stitch by hand.
What makes Hermès unusual is how it treats scarcity. It deliberately keeps production of its most desirable bags low, so demand always runs ahead of supply. That frustrates shoppers but protects the brand — a bag nobody can get easily feels worth more than one on every shelf. The company runs its own stores rather than relying on department stores, which gives it tight control over prices and how the brand is presented. Roughly half of sales come from leather goods and saddlery, with the rest spread across silk, ready-to-wear, watches, perfume, and jewelry. The money machine is remarkable. In recent years Hermès has grown revenue steadily and earns extremely high operating margins — in the low 40% range in some years — because it does not need to discount, advertise heavily, or chase volume. Its customers are wealthy individuals, particularly in Asia, Europe, and the Americas, and the brand's waiting lists give it pricing power most companies can only dream of. Rivals include LVMH and Kering, but Hermès is more focused and slower-moving by design.
The founding family still controls the business through a complex partnership structure, which matters because it keeps Hermès independent and lets it take a long view rather than chase quarterly targets. It uses its strong free cash flow to open new stores, expand leather production capacity, pay dividends, and buy back small amounts of stock. The founding family's grip once had to be defended against a silent takeover bid by LVMH, a fight Hermès won by locking a large holding into a separate family-controlled entity.
Saved answer · last researched 5 Nov 2026