What's going on?

Luxury giant Herm�s gets that bag, reporting bumper quarterly sales on Thursday.

What does this mean?

Fashionistas the world over know there�s nothing quite like a Birkin bag, but that uber-desirable tote is just one of many offerings being snapped up in Herm�s stores right now. The French haute couture fashion house was propelled to success by two key factors last quarter: one was that Covid restrictions eased in parts of China, letting affluent shoppers throng to the country�s many Herm�s stores. The other was that US shoppers made use of the strong dollar to live out lavish Emily in Paris fantasies on European soil. That helped Herm�s grow its total revenue � excluding the effects of currency swings � by over 24% last quarter versus the same time last year, around double what analysts expected.

Why should I care?

The bigger picture: Nice for some.
Herm�s results are more evidence that luxury brands are largely immune to the spending squeeze that�s hurting other retailers. Just look at high-end rival LVMH, owner of the Louis Vuitton and Christian Dior brands: �it announced stellar results of its own last week, with affluent consumers � less impacted by the cost-of-living crisis � still shelling out on nice-to-haves while the rest of us scrimp and save. Given that, you’d be brave to bet against Gucci-owner Kering when it posts results this week.

For you personally: It�s a rich man�s world.
It might sound hard to believe, but global financial wealth actually grew 10.6% last year � the fastest growth in more than a decade, and equal to an extra $26 trillion in wealth (tweet this). That�s part of the reason we�re seeing a boom in luxury spending � and while most of us don�t have a spare $10,000 lying around to buy a fancy handbag, you could still benefit from the trend by investing in the key players. Case in point: Herm�s and LVMH�s stocks have outperformed the S&P 500 by around 8% so far this year.