Hermès

Hermès International, S.A.

Company type	Société Anonyme (Euronext: RMS)
Industry	Luxury goods
Founded	1837
Founder	Thierry Hermès
Headquarters	24 rue du Faubourg Saint-Honoré, Paris, France
Area served	Global locations
Key people	Patrick Thomas (CEO), Mireille Maury (CFO), Jérôme Guerrand (Chairman of the supervisory board), Christophe Lemaire (head designer), Véronique Nichanian (menswear designer)
Products	High fashion clothing and accessory manufacture and retail
Revenue	€1.914 billion (2009)
Operating income	€462.9 million (2009)
Net income	€288.8 million (2009)
Owner	71% (Hermès family) 17.1% (LVMH) 11.9% (Public shares)
Number of employees	8,060 (2009)
Website	www.hermes.com

Hermès International, S.A., or simply Hermès (French pronunciation: [ɛʁmɛs], English: /ɛərˈmɛz/ ) is a French high fashion house established in 1837, specializing in leather, ready-to-wear, lifestyle accessories, perfumery, and luxury goods. Its logo is of a Duc carriage with horse.

History

Designers throughout the company's history have included Lola Prusac, Jacques Delahaye, Catherine de Karolyi, Monsieur Levaillant, Nicole de Vesian, Eric Bergère, Claude Brouet, Tan Giudicelli, Marc Audibet, Veronique Nichanian, Mariot Chane, Martin Margiela and Jean Paul Gaultier.

Beginnings in the 19th century

Thierry Hermès, founder of Hermès.

The Hermès family, originally Protestant Germans, settled in France in 1828. In 1837, Thierry Hermès (1801–1878) first established Hermès as a harness workshop, on the Grands Boulevards quarter of Paris, dedicated to purveying to European noblemen. He created the finest wrought harnesses and bridles for the carriage trade. The company earned acclaim in 1855, winning first prize in its class at the 1855 Exposition Universelle in Paris. Monsieur Hermès won the first-class medal of the 1867 Exposition Universelle also in Paris. Hermès's son, Charles-Émile Hermès (1835–1919), took over management from his father and moved the shop in 1880 to 24 Rue Faubourg Saint-Honoré, a location near the Palais de l'Elysée. It is at this location, still the Hermès shop today, where the new leader introduced saddlery and began retail sales. With the aid of sons Adolphe and Émile-Maurice Hermès, the company catered to the elite of Europe, North Africa, Russia, Asia, and the Americas. In 1900, the company offered the haut à courroies bag, specially designed for riders to carry their saddles with them.

Hermès Frères era

After Charles-Emile Hermès retired from the company, his sons Adolphe and Émile-Maurice took leadership and renamed the company Hermès Frères. Shortly after, Émile-Maurice furnished the czar of Russia with saddles. By 1914, up to 80 saddle craftsmen became employed under the company. Émile-Maurice later obtained the exclusive rights to use the zipper for leather goods and clothing. He thus became the first to introduce the device in France. The first leather golf jacket with a zipper, made by Hermès, was introduced in 1918.

Throughout the 1920s, Émile-Maurice took control as sole head of the business and added a new accessory collection. And he groomed his three sons-in-law (Robert Dumas, Jean-René Guerrand and Francis Puech) as business partners. Hermès introduced its first leather garment, a zippered golfing jacket for the Prince of Wales. After its exclusive use of the zipper, the mechanism was nicknamed fermature Hermès. In 1922, the first leather handbags were introduced. When Émile-Maurice's wife complained of not finding a suitable one to her liking, he took over the job, creating an array of handbags himself. In 1924, Hermès established a presence in the United States and opened two shops in French resorts. In 1929, the first women's couture apparel collection was previewed in Paris.

During the 1930s, Hermès produced some of its most recognized original goods. In 1935, the leather Sac à dépêches, later renamed the Kelly bag), was introduced, and, in 1937, the Hermès carrés (scarves) were introduced. Featuring a print of white-wigged ladies playing a popular period game, these custom-made accessory scarves were named Jeu des Omnibus et Dames Blanches. Hermès oversaw the production of its scarves from beginning 'til end, purchasing raw Chinese silk, spinning it into yarn, and weaving it into fabric twice as strong and heavy as most scarves on the market at the time. The company's scarf designers spent years creating new print patterns, individually screen-printed with vegetable dye. Each added color would be allowed a month to dry during the process of its creation before the next color was applied. Designers had over 200,000 different colors from which to choose. The most complicated design might feature 40 colors. In 1937, a dedicated scarf factory was established in Lyon, France; the same year, Hermès celebrated its 100th anniversary.

Following the introduction of scarves, the accessory became integrated into French culture. In 1938, the Chaîne d’ancre bracelet and the riding jacket and outfit joined the classic collection. By this point, the company's designers began to draw inspirations from paintings, books, and objets d’art. The 1930s also witnessed Hermès's entrance into the United States market by offering its products in a Neiman Marcus department store in New York; however, it later withdrew. The year 1949 saw the launch of the Hermès silk tie. Also in the same year, the first perfume, Eau d'Hermès, was produced.

During sometime in his management, Émile-Maurice summarized the Hermès philosophy as "Leather, sport, and a tradition of refined elegance."

Post-Émile-Maurice Hermès

Robert Dumas-Hermès (1898–1978) succeeded Émile-Maurice after his death in 1951, working in close collaboration with brother-in-law Jean-René Guerrand. Technically, Dumas became the first man not directly descended from Hermès père to lead the company due to his being connected to the family through marriage. Thus, he incorporated the Hermès last name into his own, Dumas-Hermès. The company also acquired its duc-carriage-with-horse logo and signature orange boxes in the early '50s. Dumas created original handbags, jewelry, and accessories and was particularly interested in design possibilities with the silk scarves. Ironically, during the mid-20th century, scarf production slackened. World Tempus, a Web portal dedicated to watchmaking, states that "brought to life by the magic wand of Annie Beaumel, the windows of the store on Faubourg Saint-Honoré became a theatre of enchantment and a Parisian meeting-place for international celebrities." In 1956, a photo of Grace Kelly, who had become the new Princess of Monaco) carrying the Sac à dépêches bag appeared in Life. Thus, the company — or possibly more like the public — renamed it the Kelly bag, and it became hugely popular. By the late 1950s, the Hermès logo had reached renown status. In the 1960s, Hermès re-entered the U.S. market by offering its silk ties at Neiman Marcus department stores. Chrystler Fisher, a former executive at Neiman Marcus, oversaw the Hermès American operations, tailoring to customers via a toll-free telephone number, customers' service department, and direct mail. The perfume business was made a subsidiary in 1961 concurrently with the introduction of the perfume Calèche (named after a woman's large, folded, hooped hood worn in the 18th century).

The falter of Hermès and revival by Jean-Louis Dumas-Hermès

In the 1970s, Hermès opened multiple locations all over Europe, the United States, and Japan. However, despite the company's apparent success, Hermès began to fall back throughout the 1970s in comparison to other competitors. This was duly because Hermès aimed to use only natural materials for its products, unlike other companies that strove to produce fashions of new man-made materials. During a two-week lapse in orders, the Hermès workrooms were unoccupied. The house formed itself as a holding company in 1976 and continued expansion worldwide. Jean-Louis Dumas-Hermès, the son of Robert Dumas-Hermès, became chairman in 1978, concentrating in the areas of silk, leather, and ready-to-wear, adding new product groups to those made with its traditional techniques. Unlike his father, Jean-Louis was connected to the Hermès maternally. The new leader extensively traveled worldwide. After his marriage to Rena Greforiadès, he entered the buyer-training program at Bloomingdale's, the New York department store. He had joined the family firm in 1964 and aided the ailing company by turning around its downhill progression. Dumas brought in designers Eric Bergére and Bernard Sanz to revamp the apparel collection, and, in collaboration, added unusual entries. Such were the python motorcycle jackets and ostrich-skin jeans, which were dubbed as "a snazzier version of what Hermès has been all along." Annual sales in 1978, when Jean-Louis became head of the firm, were reported at US$50 million. In 1979, Hermès launched an advertising campaign featuring a young, denim-clad woman wearing an Hermès scarf. The purpose was to introduce the Hermès brand to a new set of consumers. As one observer noted, "Much of what bears the still-discreet Hermès label changed from the object of an old person's nostalgia to the subject of young peoples' dreams." Also in the 1970s, the watch subsidiary, La Montre Hermès, was established in Bienne, Switzerland.

Throughout the 1980s, Dumas strengthened the company's hold on its suppliers., resulting in Hermès's gaining great stakes in prominent French glassware, silverware, and tableware manufacturers as Puiforcat, St. Louis, and Périgord. The company celebrated its 150th anniversary in 1987 by "affirming its unique identity as a company both industrial and traditional, multi-sited and Parisian, traditional and innovative, and founded on a constant striving for excellence." By now women sporting Hermès accoutrement carried the Kelly bag, Constance clutch, brightly colored leathers, cashmeres, bold jewelry, tricolor spectator shoes, and silk ballet slippers. For men, the brand made leather jackets with sherpa lining and trim, gabardine blazers, greatcoats, and patterned silk ties.

Hermès' growth

By 1990, annual sales were reported at US$460 million. The dramatic rise in revenue was mainly attributed to Dumas's strategy. Fifty percent of sales in the early 1990s were generated from Europe despite Dumas's program of geographical expansion. The United States contributed 11 percent, while the Asia/Pacific region made up one-third of sales. Estimated sales increased 23 percent from 1984 to 1994. However, future profits were expected to rise in only single-digit percentages.

Tactics from the 1980s made tableware one of Hermès's most promising business subsidiaries for the 1990s. The collection of Hermès goods was expanded in 1990 to include over 30,000 pieces. New materials used in the collection included porcelain and crystal. The company also took to releasing two new scarf collections each year throughout the 1990s, some of which were limited designs including The Road (1994) and The Sun(1995)). Hermès relocated its workshops and design studios to the outskirts of Paris, in Pantin, occupying a spacious contemporary glass building in 1992. By June 1993, Hermès had gone public on the Paris Bourse (stock exchange). The equity sale generated more excitement than the semiannual sales at Hermès's flagship store. The 425,000 shares floated at FFr 300 (US$55 a the time) were oversubscribed by 34 times. Dumas told Forbes magazine that the equity sale helped lessen family tensions by allowing some members to liquidate their holdings without "squabbling over share valuations among themselves." During that year, Fisher resigned from his position as head of the U.S. operations and was succeeded by sixth-generation Hermès descendant Laurent Mommeja, who promised to double U.S. company sales by 1998. Shares were trading at FFr 600 by 1995.

To this point, the Hermès family still kept a strong hold of about 80 percent in stocks, placing Jean-Louis Dumas and the entire family on the Forbes list of billionaires. Mimi Tompkins of U.S. News & World Report called the company "one of Paris' best guarded jewels." In the years to follow, Dumas began to decrease Hermès franchises from 250 to 200 and increased company-owned stores from 60 to 100 to better control sales of its products. The plan was to cost about FFr 200 million in the short term but was to increase profits in the long term. Having around FFr 500 million to invest, Hermès continued ahead, targeting China for company-operated boutiques, finally opening a store in Beijing in 1996. The following year, Belgian modernist designer Martin Margiela was hired to supervise women's ready-to-wear. By the late 1990s, Hermès continued to extensively diminish the number of franchised stores, buying up those including in Marseilles, Padua, and Berlin and opening more company-operated boutiques such as those in Las Vegas and Atlanta). Fashion eyebrows were raised in September 1999 when Hermès paid FFr 150 million for a 35 percent stake in the Jean-Paul Gaultier fashion house. Greeted nonetheless as a positive development both for the relatively small Gaultier group and for Hermès, it was seen as part of a consolidation in the luxury goods market. In the latter part of the 1900s, the company encouraged its clientele to faites nous rêver (make us dream), producing throughout the period some of the most artistically atypical orders.

From the 2000s through today

In 2000, five boutiques were opened — on Madison Avenue in New York and in Lisbon, Santiago, Barcelona, and Taiwan. The first John Lobb footwear store was also opened that year in New York. During this time, the company renovated its Ginza, Tokyo, location and opened a branch in Moscow. In 2003, iconoclastic Margiela retired from Hermès as head designer, and the even-more-outrageous Jean-Paul Gaultier debuted his first collection for fall/winter 2004-05. In 2004, Jean-Claude Ellena (b. Grasse, 1947) came in as the in-house perfumer or "nose" and created the successful Hermessence line of fragrances. After 28 years of leadership, Jean-Louis Robert Frédéric Dumas-Hermès, the fifth generation Hermès leader, finally retired from the family firm in January 2006. Known for his charm and one of Europe's greatest experts on luxury, he died in 2010 after a long illness. Patrick Thomas, who joined the company in 1989 and who had worked with Jean-Louis as the co-CEO from 2005, replaced him that month. He became the first non-Hermès to helm the company. Thomas expressed an interest in continuing 10 percent increase in annual sales and 15 percent profit growth. In the first half of 2008, Hermès opened a boutique In New Delhi, India. Throughout 2008, the firm continued to open and renovate some 40 boutiques in the United States, Asia, and particularly China. Their signature "H" belt was mentioned in the song by Persian rap group Zed Bazi called Mesle Man.

Hermès today

Goods

See also: Luxury goods and Upmarket

A Hermes soap bar bearing the logo.

As of 2008, Hermès has 14 product divisions encompassing leather, scarves, ties, menswear, women's fashion, perfume, watches, stationery, footwear, gloves, enamel, decorative arts, tableware, and jewelry. The use of high-quality materials and the best hand-craftsmanship available drove the prices of Hermès merchandise into very high amounts. Examples include an Hermès scarf for US$375, a tie for US$180, and a Kelly bag for US$6,900. Fashion Model Directory dubbed the Hermès look as "the height of luxury with a nod to the house's equestrian heritage."

Artisanal craftsmanship, originated from the creation of meticulous leather saddles, has spread into every branch of the company-wide product making. Hermès sales are made up of about 30 percent leather goods, 15 percent clothes, and 12 percent scarves. The company has never licensed any of its products and keeps tight control over the design and manufacture of its vast range of goods. Every Hermès leather-bound datebook, porcelain teapot, silk waistcoat, and custom saddle is made under the company name.

The brand also offers office accessories and baby gifts.

Hermès silk

Scarves

One of Hermès' most recognized products today is its signature silk scarves. The modern Hermès scarf measures 90 cm × 90 cm, weighs 65 grams and is woven from the silk of 250 mulberry moth cocoons. All Hermès scarves are hand printed using multiple silk screens and the hems are all hand-stitched. Forty-three is the highest number of screens used for one scarf to date (the charity scarf released in 2006), one screen for each color on the scarf. Scarf motifs are have ranged from the germane (such as the French Revolution or French Cuisine) to the unexpected (such as the flora and fauna of Texas). However, many generally feature equestrian motifs as well as other symbols of prestige like coats of arms, banners, and military insignia. Two scarf collections per year are released, along with reprints of older designs and limited editions. Since 1937, Hermès has produced over 2,500 designs, with the horse motifs being particularly famous and popular. Production of scarves has ranged from 250,000 in 1978 to 500,000 in 1986 to 1.2 million in 1989. During the holiday season in its Paris boutiques, on average, one scarf is sold every 20 seconds. Besides being known for its texture and design, Hermès's scarves have another unique trait that is unprecedented; that is its scarves made with a scent.

The per-pound cost of a scarf today is approximately US$1,965.00 (compared to a pound of steel at $0.19). New scarves still account for a significant percentage of Hermès's turnover. The company also offers two collections a year of cashmere/silk blend scarves.

So popular are the scarves that some find themselves made into pillows or otherwise as framed wall-hangings. Famous lovers of the Hermès scarf include Queen Elizabeth II who wore one in a portrait for a British postage stamp in the 1950s, Grace Kelly who used an Hermès scarf as a sling for her broken arm), Audrey Hepburn, Catherine Deneuve, and Jacqueline Bouvier Onassis. More recently, Sharon Stone, Sarah Jessica Parker, Hillary Clinton, Mariah Carey, Elle McPherson, Madonna, Oprah Winfrey, and Giuliana Rancic have all been photographed wearing the scarves. Notoriously, Ms. Stone used one for a bondage scene in the film Basic Instinct.

Ties

Hermès silk ties.

In addition to silk scarves, men's neckties are made from the same silks.

Partnership with the Tuareg

For years Hermès has partnered with Tuareg tribesmen on silver jewelry. The famous Saharan nomads' traditional motifs are often imitated by various Hermès products, including some of the French company's trademark scarves.

Leather

Hermès is also recognized for its handmade luggage and handbag collections. The company does not use assembly lines, only one craftsperson may work on one handbag at a time, hand-stitching each individual piece. Due to the labor-intensive nature of Hermès production methods and the use of rare materials, sometimes including exotic skins as well as precious metals, one bag can take 18 to 24 hours to create. The construction of each Kelly bag, for example, requires 18 hours of work by a single artisan. Hermès' leathers include those of alligator from Florida, buffalo from Pakistan, crocodile from Australia, shark from Thailand, lizard from Malaysia, and oxen, deer, calf, goat, and ostrich from all over the world. The leathers are professionally treated, dyed in an extensive range of colors, and handcrafted into bags of all sizes, small leather goods, and additional accessories. When Hermès leather goods require repair, owners are encouraged to bring the item back to any Hermès store where it can be shipped to the factory near Paris for repair or reconditioning.

Bags made popular through high-profile clientele include the "Kelly bag", introduced in the 1930s and made popular by Grace Kelly, the Constance shoulder bag with a double strap and large H clasp), and the Trim shoulder bag preferred by Jacqueline Bouvier Onassis. Both Kelly and Constance bags remain in demand, and there has historically been a one-year waiting list. Following the global economic downturn, demand fell and waiting lists were eliminated, or substantially reduced, in many retail locations. Despite the apparent availability of the most sought-after models, Hermès nevetheless reported profits for the worst fiscal quarters of 2008.

A Hermès Birkin bag.

Another famous handbag, the Birkin, was named for actress Jane Birkin, who co-designed the bag with company president Jean-Louis Dumas after complaining that her Kelly bag was not practical for everyday use. Ms. Birkin has since stopped carrying her namesake bag, saying it contributed to her tendonitis. Regardless, the bag remains among the most requested and has the longest waiting list — up to six years depending on the type of leather — of any other luxury Hermès item. The price of the smallest Birkin reaches into five and six figures for larger sizes, different leathers, and special orders, which can include, but are not limited to, bi- and tricolor orders). In popular culture, the Birkin bag has been featured on television shows such as Gilmore Girls, Sex and the City, Will & Grace, Gossip Girl, and Girlfriends as well as on the arms of well-heeled celebrities like Victoria Beckham, Coleen Rooney, Alex Curran, Kate Moss, Martha Stewart, Jada Pinkett Smith, and Oprah Winfrey. It is also the subject of tell-all memoir Bringing Home the Birkin by Michael Tonello, published by HarperCollins in 2008.

To benefit the International Federation of Human Rights in 2009, Jane Birkin herself auctioned off a black calfskin version, which now holds the world record at (€74,352 or $101,000 at the time).

In November 2009, model Naomi Campbell consigned a Birkin in pale-green alligator to Artcurial, the Paris auction house, for proceeds to be contributed to the White Ribbon Alliance for Safe Motherhood.

Perfumery

Hermès started its fragrance line in 1951. Since then, the company has created several scents for both men and women. Women's include the recently created Kelly Calèche; others have been Eau des Merveilles, 24, Faubourg, Calèche, Rouge Hermès, Hiris, Parfum d'Hermès and Amazone. Men's fragrances include Terre D'Hermès, Rocabar, Équipage, and Bel Ami. Fragrances for both men and women include Eau d'Orange Verte, Un Jardin sur le Nil, Un Jardin en Méditerranée, Eau D'Hermès, and eight scents in the Hermessence series which are exclusive to Hermès stores.

Shop locations

The Hermès boutique in Ginza, Tokyo.

Hermès boutiques are located worldwide in upscale locations like in Ginza district of Tokyo. The image of the stores, however, mostly integrates with the culture of the location. The world Hermès flagship boutiques are in Tokyo and Shanghai. There is also a store in the Peninsula Hong Kong hotel in Hong Kong and in the Pavilion Kuala Lumpur, Malaysia.

Further reading

• "A Boutique Where You Don’t Just Buy – You invest," Vogue, October 1974.
• Van Dyke, Grace, "Hermès: Old World Luxury in the New World," USA Today, July 1994.
• Dryansky, G.Y., "Hermès: Quality with a Kick," Harper's Bazaar, April 1986.
• Berman, Phyllis, "Mass Production? Yech!," Forbes New York, September 22, 1986.
• "Scarves Everywhere," The New Yorker, January 30, 1989.
• Aillaud, Charlotte, "The Hermès Museum: Inspiration for the Celebrated Family Firm," Architectural Digest (U.S.), January 1989.
• Tompkins, Mimi, "Sweatshop of the Stars," U.S. News and World Report, February 12, 1990.
• Gandee, Charles, "Jean-Louis Dumas- Hermès Is Flying High," House & Garden (New York), August 1990.
• "The Handbags to Have," The New York Times, April 14, 1991.
• "Hermès: Still in the Saddle," Women's Wear Daily (U.S.), September 25, 1991.
• "Hermès of Paris, Inc.," The New York Times, October 5, 1991.
• Slesin, Susan, "Ah, the Horse," New York Times, May 21, 1992.
• Ellena, Jean-Claude, Perfume: The Alchemy of Scent, New York: Arcade, 2009.
• Burr, Chandler, The Perfect Scent: A Year Inside the Perfume Industry in Paris and New York, New York: Henry Holt, 2007.

External links

• Official website
• History of the Hermès Kelly Bag and Grace Kelly
• Hermes Birkin