Posted by Leonard Steinberg on April 28th, 2014

The super-luxury market is alive and well as witnessed by Hermes’ forecast-beating 14.7% rise in like-for-like first-quarter sales on Tuesday, driven by strong demand for its ultra high quality fashion and leather goods.

Sales in Japan, one of its biggest markets, were boosted by purchases ahead of anticipated price increases and a value added tax hike on April 1. Revenue in Japan rose 22% in the first quarter, while trading remained buoyant in the United States and China. Hermes expects sales to drop in the next quarter due to higher taxes…..a potent message to all who think raising taxes raises revenues….the exact opposite is true. Italy also showed signs of a recovery.

Hermes performance beat rivals Gucci and Louis Vuitton: is it possible that ultra-quality is the luxury item consumers are willing to pay up for? It appears so. This trend is also being witnessed in New York real estate where a week ago we launched the exquisitely appointed Seven Harrison Street in Tribeca, a beautifully designed and executed conversion of an old Tribeca landmark into 12 immaculate condominiums designed by Steven Harris. Just like Hermes, this building has gone the extra mile to deliver super quality including plaster moldings, La Cornufe appliances, Nanz hardware and Forbes and Lomax lighting switches not to mention no soffits or hideous HVAC grills. Without fail, every prospective buyer who has visited the Lucien Resse-Roberts furnished model apartment has commented on the extra attention to detail, the level of quality and thought and the contrast this building displays next to so many somewhat-equally-priced buildings in New York. Just like an Hermes product, this building seems to have hit it on the nail by taking quality one step further. After only a week, we have over 40% of the building with contracts out.

It is only fitting that manufacturers or developers who actually deliver real quality should be handsomely rewarded.