Hermes Expects To Hit A Rough Patch In The Next 2 Years – 18/2/10

Last week, Hermes opened their first-ever men’s store in New York, but they were not their usual optimistic, quietly confident selves …

The reason for their gloomy outlook? Fear about future luxury taxes.

Hermes International CEO, Patrick Thomas, told Reuters that he believes “Governments worldwide will have little choice but to raise taxes on the rich to address ballooning deficits, a development that would harm luxury spending in the coming years.”

Thomas continued on to say that 2011 and 2012 looked "very gloomy" for Hermes although growing sales in Latin America and Canada, and a still untapped U.S. market, could help alleviate a global slowdown for the company.

He also made an interesting point about Asian expansion, suggesting the chain was not in a rush to open that many new stores there or elsewhere. "Hermes is extremely careful in the way we open new stores," he said, adding that the company usually prefers to expand its existing stores.

We’re a little surprised by the tone of this article. Earlier this month, Hermes’ Finance Director, Mireille Maury, was filled with optimism (see our February 8 report: Hermes Expects Sales To Keep Rising) and there was even talk of “business doubling in Las Vegas” on January 18. We sincerely hope that Hermes is off track with such dire predictions.