Hermes CEO Axel Dumas on helming ‘the world’s biggest craft shop’
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Hermes CEO Axel Dumas on helming 'the world'southward biggest craft shop'
With profits of more than S$2 billion, Hermes is the smallest of the major luxury players but the biggest craft store, a reputation the company can well afford cheers to its respect for craftsmen and Dumas' insistence on freedom of creation.
Hermes CEO Axel Dumas' insistence on freedom of creation allows the company to celebrate the art of craft. (Photo: Hermes/Andrew Meredith)
Axel Dumas, the 48-year-old principal executive of Hermes, the family-run French luxury house founded in 1837, is sitting in a big warehouse space almost Vauxhall, London, discussing which Shakespeare play he considers most relevant in 2019.
The space is part of a huge experiential event being staged to promote the brand's longstanding relationship with the UK, its biggest European market after France, and to celebrate Veronique Nichanian who, as artistic director of Hermes men's ready-to-clothing since 1988, is at present the longest-serving designer at a luxury house not created in their ain name. The Shakespeare is a demonstration of Dumas' enthusiasm for the playwright whose work he returns to after every four books he reads.
"I love Macbeth," he said of his favourite play. "But, for the nowadays time, the one that really resonates is Othello. Yous've got this neat hero who I retrieve has lost his ability to see reality equally being equally complex as it is, and sees it with such single-mindedness he becomes a villain. I recollect what's telling for the moment is that we have a circuitous story but because we are less and less able to bargain with information technology, everybody is radicalised into thinking they can do it in their own way."
It certainly seems an apt clarification of the Uk's current political stalemate. Is Dumas guilty of such obstinacy? "I am never dogmatic," he insisted. "The main value I try to keep in the company is freedom," he continued. "Freedom of speech, freedom of thought and and so the freedom of cosmos."
While once the dramatic plot twists at Hermes might take been worthy of 1 of Shakespeare's more pulp dramas – in particular the resolution of a court battle, in 2014, in which the group fought off the possibility of a hostile takeover by Bernard Arnault'south LVMH grouping by persuading family members (in 2011) to pool their shares in a property company that forbids them from selling for 20 years – the present mood at Hermes is akin to one of the Bard's bucolic pastorals. Advisable enough for a chief executive who likens his role to that of a gardener: "planting the seeds for the tree of tomorrow and tending to your roses every forenoon".
The poet-philosopher credo might sound a little quaint only Dumas can afford to be expansive. In the company'due south 2022 results, published on Mar 20, the group'due south consolidated revenue amounted to €five.9 billion (S$9 billion), up 10 per cent year on yr, with a 15 per cent increase in internet profit to €ane.405 billion. Hermes reported a strong presence throughout the world, with a sales growth of fourteen per cent in Asia (excluding Japan) and a 12 per cent increment in the US.
The Hermes garden continues to grow. And arguably it's for precisely the more idiosyncratic ideas that Dumas advocates – simply as his forebears did before him – that the house is currently and then fruitful. For case, Hermes has never had a marketing section: "Our new perfume is called Jardin sur la lagune," said Dumas, pronouncing every syllable in a lugubrious drawl, "which should be proof enough that we have no marketing department." Instead, the make takes a more Darwinian arroyo to its wares. "We nigh never practice a production launch," Dumas explained of the group'due south 15 categories, which include ready-to-habiliment, perfumes, jewellery, silk and leather goods. "We create novelty, we permit creativity lead and and so nosotros see what survives . . . "
He extends the same freedoms to the group's store managers, each of whom has free rein to pick what they want to carry in their store with scant regard for minimum orders. "The buyer has all the ability," said Dumas, "every store manager has the ability to decide his own array." It sounds bonkers, only it works. "When I arrived at the leather department, the start affair the finance department said to me was: 'We demand to stop orders of the bags that are less than ten units,' " said Dumas of his early consecration as chief executive, a role he causeless in 2022 later on a stint in banking.
"And I said: 'OK, how much does it represent from the total club?' And they told me, 15 per cent. So, of course, I said, I'k not going to get rid of 15 per cent of the leather business on my first solar day. And sometimes there are 10 units of the same handbag spread over our 310 stores. And a lot of people will never see it, only I honey the thought. OK, on the negative side, in terms of supply chain and organization of production, it's less efficient," he conceded. But the system works in other ways: "Information technology obliges Hermes to be multi-local and various."
With its focus on diversity and a curated arroyo to sales in local markets, Hermes has found itself fashionably on-bulletin as the rights and wrongs of global expansion take become an industry preoccupation. "I retrieve what is nice for Hermes is that the macro of China is good, but nosotros are even so micro," said Dumas of the brand's position in Asia. "We didn't subtract during the slowdown in 2022 for corruption because we had a very unlike clientele at the fourth dimension, so we were peradventure the only ones who still grew. Then afterwards that, [in] 2016/17 we grew again." Only things have changed since 2009 when the Asian market first exploded. "Information technology's much more polarised. I think nosotros still have some very good macroeconomic trends for China but to be successful you need to have your own micro strategy: it'south about your product, your relevance to the client, and the faithfulness of them also."
Some other hot topic, sustainability, is likewise an surface area in which Hermes has found itself a leader. "I do believe, and you can challenge me on that, that at Hermes we are much more function of the solution than the problem," said Dumas of the environmental issues now plaguing the business organisation of mode. "Get-go of all, we take the utmost respect for the natural material that we apply, and that tin but work in a sustainable environment in a relationship with nature. And secondly our bags are made by hand, for 16 hours apiece, which ways that in terms of usage of energy we are very depression. We don't produce a lot, and too we accept a lot of people in the visitor who repair product."
If whatever visitor were to represent the edict that nosotros should buy less but purchase meliorate, Hermes would be it. But quality materials are becoming harder to come by. "Leather is not as good as it used to be," said Dumas. "And it's a real fight. Ten years ago, it was the skills shortage among artisans that worried me the most. And nosotros found a fashion to organise schools with our education government minister, and nosotros also accept a great internal schoolhouse to train new craftspeople. Today, my greatest worry is the quality of material and where nosotros should continue to invest."
Unlike most other luxury brands which produce, co-ordinate to Dumas, around a "maximum" of 25 per cent of their product in-house, Hermes makes 75 per cent in its ain factories. "We go far in French republic or wherever there is the most cultural history and the almost know-how to do it," said Dumas. "I am non snobbish about information technology."
"Respect for the craftsmen" remains at the cadre of the concern. Information technology'south what makes the grouping, with all its gloriously esoteric offerings – from the scarfs created by a global puddle of role-fourth dimension designers (including Kermit Oliver, the Waco-based former postman who has contributed 17 scarf prints to the house since 1980) to the nourishing leather balm sold in its saddlery department, or the deliciously perfect "Constance" handbag, kickoff launched in 1969 and delivered this autumn in wallet-sized proportions – and then authentic.
"For me, the first employee in Hermes is the craftsman," said Dumas. "Then the second is sales acquaintance and so there are the people similar me in the office. In other companies you will see the marketing department beingness first . . . The concept I try to accept for the visitor is to remain a craft store. That'due south what nosotros are, the smallest of the luxury companies and the biggest craft shop around. And I recall this clan between the craftsmen, the creativity and our level of exigence for quality is what makes the company unique. We are the Last of the Mohicans," he said, throwing yet another literary reference into the mix. "Simply I hope our version has a happier ending."
By Jo Ellison © The Financial Times
READ> Meet the kickoff-time designer Hermes hired to create its latest timepiece
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