By Dr Esraa Al-Shatti

Citigroup analysts have projected that Hermes, the esteemed luxury brand renowned for its iconic Birkin bag, stands on the brink of eclipsing Louis Vuitton as the foremost brand in the luxury industry by revenue. In a report dated April 12th, Thomas Chauvet highlighted that Hermes’ sales are forecasted to surpass the significant milestone of €20 billion ($21.3 billion) by 2027, or potentially earlier—a benchmark Louis Vuitton achieved in 2022. Notably, Hermes recorded group revenue of €13.4 billion in 2023.

Chauvet emphasized the consistency of Hermes’ growth trajectory, its robust margins, and its resilient cash flow, positioning the brand as a stalwart within the luxury sector. Furthermore, Chauvet underscored Hermes’ strategic pricing approach, spanning from accessible to ultra-luxury segments, along with its adept control over distribution channels.

Additionally, opportunities for expansion beyond leather goods into categories such as ready-to-wear apparel, watches, jewelry, and tableware were identified as avenues for further growth and diversification. This projection from Citigroup marks a potential turning point in the hierarchy of luxury brands, with Hermes poised to ascend to the helm as the preeminent leader in the global luxury landscape.