Hermes Luxury Goods Poised to Benefit from Increasing Wealth Inequality and Brand Exclusivity
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Hermes is poised to benefit from AI-driven increases in wealth inequality and decreasing scarcity, allowing the rich to get richer and spend more on luxury goods.
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Hermes has created artificial scarcity for its premier handcrafted products, making them appreciating assets that strengthen brand mystique.
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Positive feedback loops reinforce Hermes' brand appeal and ability to continue raising prices for greater exclusivity.
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Competitors will struggle to erode Hermes' powerful moat consisting of network effects, the Veblen effect, high margins, and ultra-wealthy loyal customers.
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Risks include luxury demand declines from societal attitude shifts and potential competition from brands like LVMH, though probability is currently low.