Hermès

Hermès International S.A., Hermès of Paris, or simply Hermès (French pronunciation: ​[ɛʁmɛs]; /ɛərˈmɛz/) is a French high fashion luxury goods manufacturer established in 1837. It specializes in leather, lifestyle accessories, home furnishings, perfumery, jewellery, watches and ready-to-wear. Its logo, since the 1950s, is of a Duc carriage with horse. Nadège Vanhee-Cybulski is the current creative director.

Beginnings in the 19th century

Thierry Hermès (1801–1878) was born in Krefeld, Germany, to a French father and a German mother. The family moved to France in 1828. In 1837, Thierry Hermès first established Hermès as a harness workshop in the Grands Boulevards quarter of Paris, dedicated to serving European noblemen. He created high-quality wrought harnesses and bridles for the carriage trade, winning several awards including the first prize in its class in 1855 and again in 1867 at the Expositions Universelles 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 du Faubourg Saint-Honoré where it remains to this day. With the help of his sons Adolphe and Émile-Maurice, Charles-Émile introduced saddlery and started selling his products retail. The company catered to the élite of Europe, North Africa, Russia, Asia, and the Americas. In 1900, the firm offered the Haut à Courroies bag, specially designed for riders to carry their saddles with them.

Hermès Frères era

After Charles-Émile Hermès's retirement, sons Adolphe and Émile-Maurice took leadership and renamed the company Hermès Frères. Shortly after, Émile-Maurice began furnishing the czar of Russia with saddles. By 1914, up to 80 saddle craftsmen were employed. Subsequently, Émile-Maurice was granted the exclusive rights to use the zipper for leather goods and clothing, becoming the first to introduce the device in France. In 1918, Hermès introduced the first leather golf jacket with a zipper, made for Edward, Prince of Wales. Because of its exclusive rights arrangement the zipper became known in France as the fermeture Hermès (Hermès fastener).

Throughout the 1920s when he was the sole head of the firm, Émile-Maurice added accessories and clothing collections. He also groomed his three sons-in-law (Robert Dumas, Jean-René Guerrand, and Francis Puech) as business partners. In 1922, the first leather handbags were introduced after Émile-Maurice's wife complained of not being able to find one to her liking. Émile-Maurice created the handbag collection himself.

In 1924, Hermès established a presence in the United States and opened two shops outside of Paris. In 1929, the first women's couture apparel collection was previewed in Paris. During the 1930s, Hermès introduced some of its most recognized original goods such as the leather "Sac à dépêches" in 1935 (later renamed the "Kelly bag" after Grace Kelly) and the Hermès carrés (square scarves) in 1937.

The scarves 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 entry into the United States market by offering products in a Neiman Marcus department store in New York; however, it later withdrew. In 1949, the same year as the launch of the Hermès silk tie, the first perfume, "Eau d'Hermès", was produced.

From the mid-1930s, Hermès employed Swiss watchmaker Universal Genève as the brand's first and exclusive designer of timepieces, producing a line of men's wrist chronographs[ (manufactured in 18K gold or stainless steel) and women's Art Déco cuff watches in 18K gold, steel, or platinum. Both models contained dials signed either "Hermès" or "Hermès Universal Genève", while the watch movements were signed "Universal Genève S.A.". The Hermès/Universal partnership lasted until the 1950s.

Émile-Maurice summarized the Hermès philosophy during his leadership as "leather, sport, and a tradition of refined elegance."

Post-Émile-Maurice Hermès

During this period, Louis Vuitton began to incorporate leather into most of its products, which ranged from small purses and wallets to larger pieces of luggage. In order to broaden its line, the company revamped its signature Monogram Canvas in 1959 to make it more supple, allowing it to be used for purses, bags, and wallets. It is believed that in the 1920s, counterfeiting returned as a greater issue to continue on into the 21st century. In 1966, the Papillon was launched (a cylindrical bag that is still popular today). By 1977 with annual revenue up to 70 million Francs ($14.27 million US$). A year later, the label opened its first stores in Japan: in Tokyo and Osaka. In 1983, the company joined with America's Cup to form the Louis Vuitton Cup, a preliminary competition (known as an eliminatory regatta) for the yacht race. Louis Vuitton later expanded its presence in Asia with the opening of a store in Taipei, Taiwan in 1983 and Seoul, South Korea in 1984. In the following year, 1985, the Epi leather line was introduced.

Robert Dumas-Hermès (1898–1978), who succeeded Émile-Maurice after his death in 1951, closely collaborated with brother-in-law Jean-René Guerrand. Dumas became the first man not directly descended from Hermès père to lead the company because his connection to the family was only through marriage. Thus, he incorporated the Hermès name into his own, Dumas-Hermès.

The company also acquired its Duc-carriage-with-horse logo and signature orange paper boxes in the early 1950s. Dumas introduced original handbags, jewelry, and accessories and was particularly interested in design possibilities with the silk scarves. Ironically, during the mid-20th century, scarf production diminished. World Tempus, a Web portal dedicated to watchmaking, states: "Brought to life by the magic wand of Annie Beaumel, the windows of the store on the Faubourg Saint-Honoré became a theatre of enchantment and [established the store as a Parisian meeting-place for international celebrities." In 1956, a photograph of Grace Kelly, who had become the new Princess of Monaco, was shown carrying the "Sac à dépêches" bag in a photography in Life magazine. Purportedly, she held it in front of herself to disguise her pregnancy. Thus, when the public began calling it the "Kelly" bag, a name subsequently adopted by Hermès, it became hugely popular.

The perfume business became a subsidiary in 1961, concurrently with the introduction of the "Calèche" scent, named after a hooded four-wheeled horse carriage, known since the 18th century, and is also the company's logo since the 1950s. (In 2004, Jean-Claude Ellena became the in-house perfumer or "nose" and has created several successful scents, including the Hermessence line of fragrances.)

Decline and revamp

Despite the company's apparent success in the 1970s, exemplified by multiple shops' being established worldwide, Hermès began to decline, compared to competitors. Some industry observers have assigned the cause to Hermès's insistence on the exclusive use of natural materials for its products, unlike other companies that were calling on new man-made materials. During a two-week lapse in orders, the Hermès workrooms were silent. The renewed success of Hermès's fragrances in the marketplace was probably due to the public's increasingly paradigmatic shift of back to natural materials as opposed to artificial. This point undoubtedly contributed to reestablishing Hermès's scents as a major player in the fragrances marketplace.

Jean-Louis Dumas, the son of Robert Dumas-Hermès, became chairman in 1978 and had the firm concentrate on silk and leather goods and ready-to-wear, adding new product groups to those made with its traditional techniques. Unlike his father, Jean-Louis was maternally related to the Hermès family. Travelling extensively and marrying Rena Greforiadès, he entered the buyer-training program at Bloomingdale's, the New York department store. Having joined the family firm in 1964, he was instrumental in turning around its decline.

Dumas brought in designers Eric Bergère and Bernard Sanz to revamp the apparel collection and, in collaboration, added unusual entries. They included 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. By 1990, annual sales were reported at US $460 million, mainly due to Dumas's strategy.) In 1979, he 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 fashion-sector 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." However, Dumas's change-of-image created outrage both within and outside of the firm.

Also in the 1970s, the watch subsidiary, La Montre Hermès, was established in Bienne, Switzerland. Then, throughout the 1980s, Dumas strengthened the company's hold on its suppliers, resulting in Hermès's gaining great stakes in prominent French glassware, silverware acquiring venerable tableware manufacturers such as Puiforcat, St. Louis, and Périgord.

Growth

From the 1980s, tableware became a strong segment of the firm. And, overall, the collection of Hermès goods expanded in 1990 to include over 30,000 pieces. New materials used in the collection included porcelain and crystal.

Hermès relocated its workshops and design studios to Pantin, just outside Paris. By June 1993 and possibly a grave mistake, Hermès had gone public on the Paris Bourse (stock exchange). At the time, the equity sale generated great excitement. The 425,000 shares floated at FFr 300 (US $55 at the time) were oversubscribed by 34 times. Dumas told Forbes magazine that the equity sale would help lessen family tensions by allowing some members to liquidate their holdings without "squabbling over share valuations among themselves."

To this time, the Hermès family was still retaining a strong hold of about 80% 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 following years, Dumas decreased 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 to increase profits in the long term. Having around FFr 500 million to invest, Hermès pressed ahead, targeting China for company-operated boutiques, finally opening a store in Beijing in 1996.

In 1997, Jean-Louis hired iconoclastic Belgian designer Martin Margiela to supervise women's ready-to-wear.

By the late 1990s, Hermès continued extensively to diminish the number of franchised stores, buying them up and opening more company-operated boutiques. The fashion industry was caught off guard in September 1999, when Jean-Louis decided to pay FFr 150 million for a 35% stake in the Jean-Paul Gaultier fashion house. In the latter part of the 1900s, the company encouraged its clientele to faites nous rêver (make us dream), producing throughout the period artistically atypical orders.

The 2000s to today

In 2003, Margiela left Hermès, and highly controversial Jean-Paul Gaultier, as the head designer, debuted his first ready-to-wear collection for fall/winter 2004–05.

After 28 years as head of the firm, Jean-Louis Dumas retired in January 2006. Known for his charm and one of Europe's greatest authorities on luxury, he died in 2010 after a long illness. Patrick Thomas, who had joined the company in 1989 and who had worked with Jean-Louis as the co-CEO from 2005, replaced him. Thomas became the first non-Hermès family member to head the company.

In February 2015, Hermès has announced an increase of its turnover of 9.7%, which represents more than €4 billion in sales.

This increase is internationally visible. In Asia, excluding Japan, where the turnover grew 7%, in America, with 10% rise, in Europe where it grew 7% growth and generated a good performance in the group’s stores.