Hermès: Following the rich & royal legacy

Hermès: Following the rich & royal legacy

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“As a child I used to ogle my mother’s scarves. Today, I have trouble pulling myself away from an Hermès collection in a store window.” This small story of a young girl tells the heritage of Hermès and its aspirational value today.

The 178 years old french brand ‘Hermès’ seems to transcend the luxury brand category all together. Founded by in 1837, Hermès was originally known for high quality manufacturing of harnesses and saddles mainly to cater to the equestrian riding supplies to European nobleman. Presently headed by Nadège Vanhee-Cybulski as the creative director, Hermès’s DNA includes craftsmanship, history and quality at its core. The key message of Hermès is exclusivity for the elite. Hermès honours its roots through its products thereby reminding consumers of the brand’s history.

In the words of former creative director Jean Louis Dumas, “We don’t have a policy
of image, we have a policy of product.” Its clients are rest assured that imperfect work
does not leave the atelier. Dumas’s “policy of product”—is to create functional objects made from the most beautiful and high quality materials possible, each so intelligently
designed and deeply well made it transcends fashion. Clients spend in Hermès as an
investment not an expense, because the pieces last for generations. The name itself
is a dream and its proper pronunciation must often be taught. “Air-mez”—Greek for
‘messenger of god with winged sandals’. Almost two centuries ago, a royal coronation
might be delayed until its exquisitely stitched Hermès fittings for the carriage arrived,
because a perfectly handstiched piece cannot be rushed. Even in this century the wait list
for items such as the birkin bag is from three to five years. Each Birkin takes 18 to 25 hours to make, and the Paris workshops produce only five or so each week. Some fundamental decisions have helped Hermès protect its brand’s promise of maintaining exclusivity to its customers. This includes being one of the oldest family-owned businesses in France with its sixth generation now and most importantly not licensing the brand. In addition, the original and classic Duc Carriage with Horse logo, palette and fonts remain unchanged and iconic. The clients of Hermès have always been the rich and
royal, from the emperor Napoléon III and his empress, Eugénie to Madonna, Nicole
Kidman, Elle MacPherson and Julianne Moore.

While many luxury houses saw slowing of growth in recent years, Hermès reported
acceleration and record operating margins (Mintel, 2013) that can be attributed to
its ultra-luxury prestige positioning, and resistance to growing its retail network. With
one of the highest operating margins among other luxury brands, (over 30%), the Market
Cap of Hermès is US$38.7 billion as of May 2015. Under the aegis of Hermès, twenty five subsidiaries operate stores all over the world, distributing products made by four production units: Hermès Sellier, Hermès Parfums, La Montre Hermès and La Table
Hermès. These subsidiaries are located in Europe, Middle East, American continent,
Asia and Australia. The full range of Hermès products is available via a network of 316
exclusive stores worldwide, six of which are flagships and 21 other retail outlets. Hermès
watches and perfumes are also sold through specialist stores, duty free sales on-board and
at airports.

An epicenter of style and luxury, the first Maison Hermès flagship was established at
Rue du Faubourg Saint-Honoré in Paris. The most recent entry to the Flagship stores is on
New Bond Street. It is designed by the MRA architectural company and is consistent
with the brand DNA. Other flagship stores include Maison Hermès in Japan, Madison
Avenue in New York, Tokyo which is also the headquarters, Dosan Park in Seoul, and
world’s fifth Hermès shop, in Shanghai, China.

Hermès India is a 51:49 Joint Venture with Ashok and Neelam Khanna who own the Ista
range of business hotels. Hermès operates two stores in India that sell bags, apparels,
fragrances, jewellry, tableware, scarves and other accessories. The first store was opened
in Oberoi hotel in Delhi. The other is a standalone store on high street Horniman Circle,
in Mumbai. As of now, they are concentrating on the existing stores to develop the Indian
market by investing in communications.

Hermès’s latest collection, which is men’s ready-to-wear collection spring summer 2016 is a perfect example of less being more in understated sophistication. It was a blend of
downplayed luxury and subtle flamboyance. The excellent fabrics added a sense of
ease. Basics and outerwear were paired with statement pieces to remind us that this
is the label to sell a US$90,000 t-shirt recently.

The ultra luxury french retailer is best know for its iconic leather handbags, the Birkin and Kelly bags, named for actress and Grace Kelly respectively. Birkin bag was not only named after but also co-designed with . It has been one of the
most expensive luxury goods in the world costing around $10,000 and made of exotic
skins such as as alligator, crocodile and even ostrich. The muse of “Kelly bag”, Gracy
Kelly, who had then become the new Princess of Monaco, carried the Sac à dépêches bag
to shield her secret baby bump from the paparrazzi. It was splashed across magazines
and adored all over the world. Kelly bag is smaller than a Birkin Bag. Since the
company does not use assembly lines, and one craftsperson handstich one individual
handbag at a time, one bag can take 18 to 24 hours to create.

A Little known fact is that Grace Kelly once used a Hermès scarf as a sling for her broken
arm.

ABOUT THE AUTHOR
, Founder and CEO, Luxury Connect and Luxury Connect Business School
Abhay Gupta has been involved in the evolution of fashion and luxury segment from
manufacturing, joint venture, factory set-up and franchising. Gupta is a recipient of the
prestigious ‘Luxury Retail Icon 2012’ by Asia Retail Congress; Fondazione Altagama has
also recognised his contribution in the growth of luxury industry in India. He has been
featured in Forbes Luxury Trend Report 2012 as one of the Industry Leaders.