- Fashion house Hermès awarded each of its 25,000-strong headcount a bonus of nearly $5,000 after reporting positive 2024 results. While the money won't scratch the surface of the cost of a famous Birkin or Kelly bag, it does represent a sizable amount for France's cost of living.
Luxury fashion brand Hermès is forking out nearly $118 million in bonuses to its 25,000 employees after reporting strong end-of-year results for 2024.
Last week, the Paris-based retailer said its revenue for FY24 totaled €15.2 billion ($15.9 billion), up 15% on a constant exchange rate.
And the heritage brand is making good on its promise to share its success with staff, confirming employees will be awarded a €4,700 bonus ($4,925) each.
Executive chairman Axel Dumas said on the call Friday: "Faithful to its responsible employer commitment and the will to share the fruit of its growth with those who contribute every day to it, Hermès will be distributing at the beginning of the year a bonus of €4,500 to all its employees worldwide in 2024."
And while a near-$5,000 bonus might be a welcome surprise for staffers, it won't get them anywhere near close to buying the most famous items created by the brand.
Hermès is known particularly for its Birkin and Kelly bags, which come in a range of sizes and materials.
A quick search on the Hermès website reveals that a strap alone, to be swapped on and off bags, costs $1,284, putting a significant dent in the coffers of employees who may want to partake in the luxury they sell.
The brand, which has been passed down generation to generation in the Hermès and Dumas families, doesn't display its most coveted items for sale on its website.
However, resale and specialist sites list the smallest Kelly bag—named after actress Grace Kelly—as starting from around $8,800.
Larger Birkin bags—named after actress and singer Jane Birkin—in classic leather can be picked up from around $20,000.
However, the bonus is a significant boon for employees who live in France, which makes up the majority of Hermès's workforce.
According to European renting platform HousingAnywhere, rent in Paris, for example, where the brand's headquarters are based, comes to around €1,834 ($1,921) for an unfurnished apartment with utilities included.
Indeed, for employees working in any of Hermès's 23 production facilities across France, their rent on average is likely to sit around the €900 mark ($943) for a one-bed apartment.
So, while the payment may not go far toward getting employees on the ladder to a Birkin, it is likely to go some way towards their day-to-day living costs.
The brand added that in total, in 2024, it had paid out €350 million ($367 million) in exceptional bonuses, profit sharing, and incentives as part of its "social model."
On top of that, Hermès reaffirmed its commitment to DEI—a far cry from the shift that is happening across the pond.
For example, Hermès reported that 48% of its top 100 managers in the company were women, and 7.1% of staff were registered as having disabilities.
Moreover, the brand has reduced its emissions by 64% compared to 2018, Dumas added: "Nature is a source of exceptional material and lies at the heart of our model."
Outlook on luxury
Over the past few years designer brands have struggled to acclimatize to the new reality of weaker Chinese consumer demand and Gen Z shoppers who don't identify as much value in materialistic goods.
On the contrary, Dumas reported: "In 2024, all regions have shown solid performance. France +13% and Europe +19% recorded strong progressions sustained by robust demand. Japan +23% benefited from sustained and regular growth carried by the fidelity of its local customers."
Asia also had "remarkable progression," up 7% Dumas added, and while the Middle East still represents just 4% of its revenue, it saw growth of 110%.
The fashion house—established in the 1830s—is setting itself up for the long-term.
Dumas said its success in 2024 was courtesy of "divisions supported by artistic directors, a very demanding quality, preservation and transmission of our know-how."
He added: "Long-standing and new customers were present everywhere in the world. In 2024, the house stayed its course maintaining its equilibria attached more than ever to the respect of its values.
"We pursued strategic investments in our production capacity to secure our supply chain and prepare the future, as well as in our network everywhere in the world, to accompany the dynamism of sale in the long term of the house."
