For luxury founders, the market is constantly shifting. Whether it's a sudden economic downturn, changing consumer behavior, or geopolitical uncertainty, navigating these challenges is a critical part of building a sustainable brand.
In Part 2 of the three-part Hermès series on the Money & Mimosas Podcast, we explore how Hermès responded to market shifts, particularly during the 2008 financial crisis, and how their strategy can serve as a powerful model for luxury founders today.
While many luxury brands scrambled to maintain sales by slashing prices and compromising their values, Hermès stayed true to its commitment to quality and exclusivity. Their approach to navigating economic downturns is a masterclass in resilience, and it all started with their strong financial strategy. By staying grounded in their values and refining their business blueprint, Hermès was able to survive the storm and come out stronger on the other side.
Hermès’ Response to the 2008 Financial Crisis
During the global financial crisis, demand for luxury goods slowed, and many brands rushed to respond by offering discounts and mass production. In contrast, Hermès doubled down on exclusivity and quality. They understood that their customers weren’t looking for bargains but for items that stood the test of time. Here’s how Hermès handled the downturn:
Refused to compromise on quality: While others slashed prices, Hermès maintained its premium pricing model.
Limited production: They cut production to make their products even rarer, reinforcing demand and exclusivity.
Focused on long-term growth: Instead of catering to the pressures of the market, Hermès focused on long-term sustainability and brand preservation.
By making these decisions, Hermès protected their brand’s image and reinforced their brand equity—something that would pay off long after the crisis had passed.
Key Takeaways for luxury founders
1. The Hidden Dangers of Slashing Prices
When economic uncertainty hits, it’s easy for luxury founders to panic. The temptation to slash prices, chase trends, or make short-term decisions can feel like the only way to stay afloat. However, these quick fixes can dilute your brand’s integrity and erode consumer trust.
In fact, many brands that succumbed to these pressures during the financial crisis lost their exclusivity and long-term appeal. But, Hermès demonstrated how slow and steady scaling through exclusivity can help you ride out market shifts.
When others discounted to maintain cash flow, Hermès stayed firm, refused to reduce prices, and limited production to keep their products rare and highly sought after.
2. Building Economic Resilience through Strong Financial Strategy
The key to economic resilience is having a financial strategy adaptable to market conditions. Hermès didn’t just survive the 2008 crisis—they thrived, and a large part of their success came from refining their financial strategy ahead of time.
They strengthened their position in the market by prioritizing quality over volume, maintaining premium pricing, and reinforcing brand exclusivity. When many luxury brands were focused on short-term survival, Hermès focused on building long-term value.
Action steps for Luxury Founders during slowdowns
Responding to Market Shifts: Don't compromise your brand when demand slows or market conditions shift. Stay true to your values and focus on long-term growth rather than short-term fixes.
The Importance of Financial Clarity: Build a financial plan that doesn’t just survive downturns but thrives through them. Refine your strategy in advance so that your brand remains strong when the market is unpredictable.
Maintain Exclusivity: When scaling, don’t sacrifice your brand’s exclusivity for the sake of growth. Create a pricing and production strategy that ensures your products remain rare and desirable.
The 4C Financial Refinement Formula
In the Raising Capital Masterclass, we cover the 4C Financial Refinement Formula that helped Hermès navigate the 2008 crisis:
Cash Flow: Hermès maintained high margins through their premium pricing, avoiding the need for quick revenue boosts from discounts.
Cost Structure: They kept operational costs in check by aligning production with long-term demand, not short-term sales spikes.
Capital Allocation: Strategic investments in quality craftsmanship and limited-edition products kept Hermès’ brand values intact while driving growth.
Contingency Planning: Hermès’ financial strategy wasn’t dependent on short-term market conditions, making them resilient in uncertain times.
These four pillars of financial strategy helped Hermès thrive during the economic slowdown, and the same principles can apply to your luxury business as well.
Creating Resilient Luxury Brands: Lessons from Hermès
The luxury market is facing its own set of challenges today, including a slowdown in global sales. The luxury slowdown of 2024—where global sales grew only 3%—is just one example of how the market is evolving.
In these times, founders must decide: will you panic and rush to meet market demand through price cuts or trend-chasing, or will you stay grounded in your values, much like Hermès, and create a strategy that ensures long-term resilience and growth?
Episode 2 of the Money & Mimosas Podcast breaks down the key lessons from Hermès’ ability to navigate market shifts and build a legacy of profitability, exclusivity, and craftsmanship.
Create Your Blueprint for Resilience
Want to dive deeper into how to build financial resilience for your luxury brand? It starts with refining your strategy. Our Masterclasses and Membership are here to ensure you have the tools to build a solid foundation.
What You’ll Learn in our masterclasses
We have three Masterclasses designed to help you level up your business.
Here’s how each Masterclass supports your next move:
Passion Purpose Profit Masterclass
Perfect for those lacking financial clarity or foundational projections. You’ll learn the 3/2/1 Financial Formula to map out your next quarter with confidence.Raising Capital Masterclass
Ideal if you’re making sales but struggling with profit. Learn the 4C Financial Refinement Formula to craft an investor-ready strategy.Scaling Sustainably & Internationally Masterclass
Best for brands ready to grow without diluting their exclusivity. You’ll gain tools to align expansion with financial vision and cultural integrity.
Your Next Steps:
Take the Quiz → Is Your Luxury Business Financially Ready for the Next Market Shift?
Purchase Your Recommended Masterclass → Or all three. Build clarity around pricing, profits, or capital.
Join the Membership → Get weekly support, founder Q&As, and exclusive investor strategies inside the Money & Mimosas Membership.
About Money & Mimosas:
Since 2014, Money & Mimosas has helped founders secure over $180 million in capital. Our proven frameworks empower luxury businesses to align their purpose with profitability, attract values-aligned investors, and scale elegantly—without compromising their brand’s soul.