Affluent splash out on Birkin bags despite rising prices

Brushing off higher prices, affluent spenders continue to splash out on luxuries including $10,000 handbags and premium drinks, updates from Birkin bag maker Hermes and spirits company Pernod Ricard showed on Thursday.
Yet with prices set to rise further, analysts were asking how long the boom can last before even the wealthy decide they must tighten their belts.
Hermes (HRMS.PA) and Pernod Ricard (PERP.PA) both said they will continue to raise prices, after beating expectations in the July-September quarter. Business was boosted by Americans returning to Europe and Asia and taking advantage of the strong dollar. Mainland China also saw a strong rebound after COVID-19 restrictions were lifted, although some restrictions have since been reimposed.
Analysts were looking closely for signs that the post-pandemic spending boom could ease after months of robust appetite from shoppers drawing on pandemic savings to treat themselves to designer labels and champagne.
Some expect the industry's rapid sales growth to begin to slow in the fourth quarter or starting next year, with the strongest labels expected to grab market share as consumers flock to best-known names.
The fourth quarter will likely start to show a deceleration with "very different performance from different brands," said Flavio Cereda, an analyst at Jefferies, predicting stronger labels like Chanel, Hermes, Louis Vuitton and Dior, as well as some smaller brands like Moncler (MONC.MI) will accelerate market share gains.
Cereda expects “no big bounce” in business in China next year citing signals from the Communist Party Congress that authorities plan to maintain COVID curbs, and in Europe, predicts the “likely disappearance of the marginal buyer”, or someone who is not a regular or core luxury consumer.