Hermès holds its ground in China as rivals slip

What happened Hermès posted first-half 2026 revenue of 8.2 billion euros ($9.3 billion), up 6% at constant exchange rates, the French luxury group announced on July 29. Second-quarter sales of 4.1 billion euros ($4.7 billion) rose 6.7% at constant rates, in line with analyst expectations of a 6.51% gain, according to Bloomberg. Recurring operating profitability came in at 41% of sales, down slightly from 41.4% a year earlier. Asia-Pacific excluding Japan grew 2% over the half, with the release citing continued growth in Greater China and an outstanding performance in South Korea. Asia including Japan remains the group’s largest region, generating 4.3 billion euros ($4.9 billion), or roughly 53% of global revenue. New Beijing flagship anchors Hermès’ China retail strategy The period was an active one for Hermès in China. The maison opened its new five-story Sanlitun flagship in Beijing in early April, reopened its Hong Kong Elements and Taipei Sogo Fuxing stores at the end of April following renovation and expansion, and brought its traveling craftsmanship showcase “Hermès in the Making” to the Shanghai Exhibition Center in May. “In the first half of 2026, Hermès delivered a solid performance, which reflects the strong desirability of its 16 métiers and the trust of its clients,” Executive Chairman Axel Dumas said in the release. The Jing Take A 2% print for Asia-Pacific excluding Japan would once have counted as cause for concern at Hermès. In 2026, it reads as outperformance, sustained by a managed-scarcity model and long waiting lists for its Kelly and Birkin bags. Rival Kering reported a day earlier that second-quarter revenue returned to growth, up 2% on a comparable basis to 3.7 billion euros ($4.2 billion), though Gucci declined 2% and the group said the Italian house’s mainland China business remained challenging even as trends improved. Bloomberg reported that LVMH, Burberry, and Moncler all disappointed this season, while Richemont outperformed on the strength of its jewelry houses. The divergence underscores how fashion-led houses are bearing the brunt of Chinese consumers’ selectivity, while brands built on constrained supply are proving harder to cut back on. Hermès’ China playbook this half also reveals how the maison intends to defend that position. Rather than celebrity ambassadors or promotional pushes, the maison leaned into experience-led retail and craft storytelling — the Sanlitun flagship, the Shanghai “In the Making” stop, and artist Xue Feng’s takeover of the Shanghai Maison’s windows. The message to Chinese clients is continuity and permanence at a moment when competitors are trimming ambitions. Americas and Japan overtake China as growth drivers Still, the geography of Hermès’ growth is shifting. The Americas ran at 15% and Japan at 11% over the half, making Asia excluding Japan the group’s slowest-growing region. Asia’s share of group revenue, including Japan, slipped to roughly 53%, from nearly 55% a year earlier, based on the company’s reported figures. China remains the foundation of the business, but it is no longer the engine — and with Hermès shares down about 20% in Paris this year before the results, some analysts have questioned whether the house should scale back leather goods production to protect brand equity. For the wider China market, Hermès’ numbers suggest demand at the top has stabilized at low but positive growth, while selectivity challenges the middle tier. The next data point arrives October 22, when the group publishes third-quarter revenue. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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Hermès holds its ground in China as rivals slip

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