, pointing to the group’s “strong integrated artisanal model” and “well-balanced retail network.” That balance is now being tested most clearly in China.  China’s slow but more selective growth  Asia remains Hermès’ largest region, generating €8.3 billion in revenue last year. Yet the composition of growth has shifted. Asia-Pacific excluding Japan grew 4.9 per cent at constant exchange rates for the year. In the fourth quarter, growth improved to 8 per cent.  Dumas was direct about the bifurcation of the Chinese market. According to the executive, the aspirational customer, those trading up via entry-level leather goods, small accessories or beauty, pulled back amid economic uncertainty and real estate deleveraging. Meanwhile, ultra-high-net-worth and established clients continued spending. And Hermès sits squarely in the latter camp. “We’ve always been able to grow,” Dumas said. “We’ve grown maybe less fast than in the past, but we grew. I don’t see the situation deteriorating.” Hermès’ leather goods division, its largest métier at €7.07 billion last year, grew 13.1 per cent at constant exchange rates. In China, management highlighted leather goods as a “very solid pillar,” alongside women’s ready-to-wear and jewellery. In other words, Hermès is growing where price elasticity is lowest. The company is not chasing volume. It is adding capacity deliberately. Last year, it inaugurated its 24th leather workshop in France, with more planned through 2030. Production expansion is measured, not speculative. Inventory, according to management, ended the year “perfectly in line” with objectives. That supply discipline acts as a shock absorber. If Chinese demand wavers, Hermès does not flood the market. It simply moderates output growth. While China commands attention, Asia’s story is broader. Japan’s double-digit growth was driven by both tourism and resilient domestic demand. Southeast Asia continues to benefit from rising wealth concentrations and infrastructure investments in Bangkok and Singapore. South Korea remains culturally influential, particularly in the ready-to-wear sector. Importantly, Asia’s luxury ecosystem is evolving. Dumas even welcomed the rise of strong Chinese brands expanding internationally, arguing that a broader appetite for luxury ultimately benefits Hermès. Local over tourist Unlike some European rivals that rely heavily on Chinese tourist spending in Paris or Milan, Hermès’ distribution model is intensely local. Chinese customers predominantly shop in China, management noted, just as Japanese customers primarily buy domestically. “For our distribution subsidiaries, their objective is to have a strong relationship with local clients. And that is unique at Hermès, that people will buy in their local store,” Dumas said.  “It’s because we have a very loyal local customer base there. Now, if you just want to take a more granular look at Europe, you could say that France depends quite a lot on tourist clients, but the rest of Europe has a very strong and dynamic local customer base.” Dumas struck a cautiously optimistic tone, suggesting that as the property crisis is digested, sentiment may gradually normalise. But he stopped short of predicting a “big turnaround.” Hermès is preparing for variability, not betting on resurgence. “We’re quite unique at Hermès in that we don’t have any countries where we’ve seen any drops and decreases,” he said. “It’s quite rare.” Pricing power and currency headwinds If growth in China is steadier than spectacular, profitability remains exceptional. Gross margin improved to 71.1 per cent, while recurring operating margin reached 41 per cent.  Hermès plans price increases of around 5–6 per cent this year, primarily to offset currency and cost inflation. Crucially, pricing is not being used to plug demand gaps but to maintain structural margin. “Our strategy is clear – our industrial cost price and the evolution of the exchange rate to offset,” Dumas said. “We try to smoothen out our currencies over the year.” Meanwhile, perfume and beauty segments, more exposed to discretionary, entry-level demand, fell 7.6 per cent at constant rates, while watches declined 1.5 per cent.  Hermès continues to deploy cash in a disciplined way.  “We use our cash flow roughly one-third for dividends, one-third for investment, and one-third… so that we can be resilient in the future,” Dumas said. Further reading: Hermès’ US sales jumped in Q4 thanks to brand steadiness.