Hermes has a knack for facing the troubles of the luxury sector with a Gallic shrug. The trick is scarcity - something that has tripped up other high-end brands.
The former saddle maker is growing at a gallop. First-half sales of euro 2.3 billion are 3.5 times what it made a decade ago, and its current rate of expansion is above the group's target of eight per cent a year. Competitors LVMH and Gucci-parent Kering are turning in first-half sales growth of six per cent and 3.5 per cent respectively.
Hermes, unlike them, is unburdened by non-luxury goods or multiple brands. But it has also kept supply tight, creating ravenous demand and years-long waiting lists for its £10,000 Birkin handbags.
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There are two reasons to think that is merited. Hermes reported a first-half operating margin of almost 33 per cent on August 28, up from around 28 per cent five years ago. LVMH doesn't break out numbers for its flagship Louis Vuitton label, but its fashion and leather division's operating profit margin has dropped from 33.7 per cent in 2010 to 25.1 per cent in the first half of 2015. Gucci's is 27 per cent.
Moreover, the company is doing better in tough regions like Asia. Hermes has exposure to the region in line with peers but seems to have benefitted from avoiding over-expansion. Its sales excluding Japan are still growing at close to seven percent a year. No stores in Ulaanbaatar for this luxury brand.
Hermes shares are no longer quite as exclusive as they were, having fallen 10 per cent since August 10, along with the whole luxury sector. But that looks overdone. Hermes gets that less is more, which makes it a scarce asset in the sector.
