Hermès will raise prices in the U.S. by about 10% starting May 1, 2025, to offset tariffs imposed by former President Trump. The luxury retailer’s price hike will apply to all products sold in America, including its iconic Birkin and Kelly handbags.
The French luxury house revealed during a call with analysts on Thursday that it would be increasing prices for American customers in order to offset the US’ 10% tariffs on EU goods. These hikes are expected to help the company protect its margins and fully compensate for the extra import costs.
For wealthy shoppers, the impact will be substantial. A $20,000 handbag will cost an additional $2,000, while luxury items priced at $100,000 could see increases of up to $10,000.
“The price increase that we’re going to implement will be just for the U.S. since it’s aimed at offsetting the tariffs that only apply to the American market,” Eric du Halgouet, Hermès’ executive vice president for finance, explained while announcing first-quarter results.
The luxury retailer reported €4.13 billion in total revenue for Q1 2025, with 7.2% year-on-year growth at constant exchange rates. This fell below analyst expectations of 8% and marked a significant slowdown from the 18% growth rate seen in Q1 2024.
Still, the Americas region performed well, with sales growth of 11%, representing about 17% of Hermès’ global market share during the first quarter.
Hermès’ leather goods and saddlery segment grew by 10% in Q1 2025, boosted by new product launches including the Mousqueton and Médor bags.
Company executives emphasized caution moving forward. “We are going to fully offset the impact of these new duties by increasing our selling prices in the United States from 1 May across all our business lines,” said CFO Eric du Halgouet.
He added: “Of course, we are cautious about the United States given the discussions, the geopolitical uncertainty which, as you know, have caused a great deal of volatility on the financial markets.”
Hermès isn’t alone in facing these challenges. Other luxury powerhouses including LVMH, Kering, Chanel, and Prada are also affected by the tariffs and may consider similar strategies.
This week, LVMH indicated it might follow suit. The luxury giant’s CFO Cécile Cabanis said price changes are “a lever we are going to consider” but that this would be determined for each brand rather than a one-size-fits-all approach.
Analysts have maintained that Hermès has preserved its pricing power and continuously outperformed luxury competitors, making it seem more equipped to handle the tariff crunch than many of its rivals.
The tariffs are part of a broader U.S. trade policy announced by Trump, imposing a minimum 10% tariff on foreign goods with a 90-day pause for many countries to negotiate better terms.
And the situation could worsen. The president has paused the so-called “reciprocal” rate on the EU — and many other countries — for 90 days. The hit to Europe’s luxury sector is implicating firms like LVMH, Kering, Chanel, and Prada, especially as Trump’s 10% base tariff could rise again to 20%.