Hermes Is Determined To Expand The Weak Category And Not Open Stores Crazily Because Of The Good Market

This year can be called the worst year for the luxury market after the bankruptcy of Lehman Brothers. According to a recent report of Bain Company, the sales of personal luxury goods such as leather goods, watches and fashion are expected to increase by only 1% in 2015 - a decrease of 6% compared with 2013.

In such an environment, Hermes, which seems to mainly sell leather goods, has seen its performance rise rather than decline. According to Hermes, in the first half of 2015, the company's net turnover was 2.3 billion euros, an increase of 21% at the current exchange rate; Even on a fixed exchange rate basis, it increased by 9%. In addition to the 1% drop in the watch business, Hermes' leather goods and harness rose by 14%; Readymade clothing and accessories increased by 8%; Perfume: 4%; And includes Jewellery , tableware, household products and other categories increased by 12%.

No matter where the market is, Hermes will always invest in customizing the product categories that meet the local characteristics. For example, when you enter the flagship store in Miami, you can find rare leather handbags that are more abundant than any Hermes store in the world. This is the response to the local market demand. Dumas said that relying on tourists is unreliable, and there are too many factors that are difficult to control, so "it is very important to connect with local customers."

"We don't have a marketing department. We provide sufficient choices for customers to decide what sells well, and then we can see which products are attractive. Obviously, we see that our fashion business is excellent, and our shoes are also strong. We believe that this fashion house has great potential." Dumas told BoF, saying that geographical factors and "craftsmanship" It is the two pillars of Hermes. Satisfying customers on this basis may be the reason why the brand is flattered.

Unlike most luxury brands that focus on the Asian market dominated by China, Hermes' retail expansion is stable and geographically balanced - after the outbreak of the global financial crisis, the ensuing economic recession has affected luxury consumption around the world, but Hermes' pace of opening stores has not been disrupted.

Opened in 2014 Miami For example, as the third flagship store of Hermes in the United States, the flagship store is positioned to "catch the rich Latin American groups who come to Miami for consumption". This is consistent with Hermes' expansion steps in the United States. In the past three years, Hermes has expanded and upgraded 8 of the 28 stores in the United States, and this year, it is in the new Brookfield Shopping Center in downtown Manhattan Place) opened an independent perfume store.

For on financial crisis Is it wise to invest in the US market? Robert, CEO of Hermes America Chavez said that the US economy has a solid foundation at the macro level, and compared with the past, people today "want to be able to buy things that can be used for a long time". He said: "This is quite different from the 'disposable' culture that has existed for decades."

Perhaps because of this, Hermes can still maintain enough flexibility in the period of luxury frustration. Although analyst Luca Solca mentioned in a recent report that Hermes' growth over the years has "probably reached its profit peak", but Dumas still disclosed to BoF that the company's plan is long-term, and maintaining balance is the reason why Hermes continues to invest in mature markets such as the United States, Europe and Japan.

"We will not say that we invest heavily in a new country, but discount heavily in another country," Dumas explained. Take Japan, where tourism and exchange rate triggered the expansion of luxury brand stores, for example. Even before the yen weakened, Hermes had opened stores in Nagoya, Tokyo and other places, laying the foundation first. "The depreciation of the yen has made the tourist economy profitable," Dumas said, "but even without tourists, we still have some good growth." Hermes' sales in Japan this year increased by 20% in the first half of the year alone.