Hermès has long held a special place in luxury-seekers’ eyes as one of the most elite brands from which to own bags and scarves. Its popularity has been no secret—still, in the past decade, sales have popped 226%, taking the brand to new heights.
With that sort of boom, particularly amid a recent slowdown in the luxury industry, it’s hard to think of Hermès as just a dusty old company that’s been around for nearly two centuries.
Instead, it’s best thought of as somewhat of a startup, said Pierre-Alexis Dumas, the French company’s artistic director and sixth-generation Hermès heir.
“I always like to say that Hermès is an old lady with startup issues because we’ve grown so fast in such a small period,” Dumas said during a CBS News 60 Minutes episode released in December. “How can you grow so fast without changing what makes you strong?”
There are several ways in which Hermès is doing things differently than its competitors, such as prioritizing quality over quantity. That’s why, Dumas said, even if Hermès bags come with a price tag of over $10,000, it’s for a justifiable reason.
“Speed is the structuring value of the 20th century,“ he said.
“We went from horse carriages to the internet. Are we going to be so obsessed with speed and immediate satisfaction? Maybe not? Maybe there is another form of relation to the world, which is linked to patience, to taking the time to make things right.”
PARIS, FRANCE – FEBRUARY 26: (EDITORIAL USE ONLY) Pierre-Alexis Dumas attends the Harper’s Bazaar Exhibition as part of the Paris Fashion Week Womenswear Fall/Winter 2020/2021 At Musee Des Arts Decoratifs on February 26, 2020 in Paris, France. (Photo by Pascal Le Segretain/Getty Images)
The Hermès formula is unlike that of its rivals, but it has worked. Its 2014 sales were €4.1 billion, and by 2023, those figures had swelled to €13.4 billion. The company’s shares have risen 284% in the last five years.
Hermès’s journey has been so spectacular that it’s spawned millionaires among the founding family’s distant relatives. Dumas has been with the French bagmaker for nearly two decades, presiding over the recent growth wave.
Few others have been able to replicate Hermès’s success in maintaining a loyal client base among the affluent while remaining relatively inconspicuous. For instance, the company doesn’t have a marketing department. Yet demand for iconic Hermès bags has consistently outstripped supply—a phenomenon that has unintentionally added to the French company’s allure.
Scaling new heights: Hermès style
A single craftsperson works on a bag, which can take at least five years of training and several hours to make. That automatically creates scarcity as Hermès produces fewer bags than mass-produced brands, which, in turn, pushes prices up.
Some critics have raised issues about the bagmaker creating artificial scarcity. But Dumas pushes back on this idea.
“It makes me smile that this is a diabolical marketing idea. That can only come out of people obsessed with marketing,” he said. “Whatever we have, we put on the shelf, and it goes.”
The company has been looking to train more artisans to help quench a seemingly insatiable thirst for Hermès bags.
Another criticism of Hermès’s model is how shoppers can’t simply walk into a store and expect to buy a Birkin. They must work their way up with a proven purchase history of other Hermès items before they can see their most sought-after bags worth thousands of dollars.
A few shoppers have recently rallied together to sue Hermès for deliberately making it difficult to buy its top-tier products, even if people are willing to pay the money for them.
So far, that case hasn’t yielded consumers any success, as a U.S. judge said during a hearing last year that “Hermès can run its business any way it wants. If it chooses to make five Birkin bags a year and charge a million [for] them, it can do that.”
Despite Hermès’s methodical approach to bag-making, the sixth generation of the founding family has also sought to learn from their ancestors’ mistakes.
“I don’t want to be like my predecessors in the family, that is to say, to die in office,” Axel Dumas, the executive chairman of Hermès, told the Financial Times in September when speaking about succession planning. “The risk is falling in love with what one has made, and not being able to change. At some point, you need fresh eyes.”
Representatives at Hermès didn’t immediately return Fortune’s request for comment.
A version of this story originally published on Fortune.com on Dec. 17, 2024.
Texas healthcare officials are cancelling 50 planned vaccination clinics as measles spreads throughout the state. The decision comes as the CDC and Department of Health and Human Services have cut funding, which was originally allocated to communities during the pandemic.
Cuts to federal funding have forced healthcare officials in Texas to shutter 50 planned vaccination clinics in Dallas, one the state’s most populated areas, as a measles outbreak continues to grow across the state.
Many of those clinics had been planned for areas where vaccination rates for measles, mumps and rubella were low. The shots would have been freely offered to families.
The decision follows $11.4 billion in funding cuts by the Centers for Disease Control and Prevention and the Department of Health and Human Services. That money, originally, was allocated to community health departments during the pandemic. Last week, however, HHS said it would “no longer waste billions of taxpayer dollars responding to a non-existent pandemic that Americans moved on from years ago.”
While COVID is not as big of a concern these days, Texas has 422 confirmed cases of measles at the moment. While none are in Dallas, health officials are trying to protect that city, given how fast the disease can spread.
Due to the cuts, 11 full-time and 10 part-time staffers at the Dallas County Health and Human Services Department have been let go, which officials say could impact their ability to fight the spread of the disease. The majority of those workers either gave vaccines or were epidemiologists and lab staff involved with measles surveillance and prevention.
(Clinics in West Texas, where many of the cases are, will continue for now.)
The cuts come a month after Robert F. Kennedy Jr., a vaccine critic and the nation’s top health official, said his agency would continue to fund Texas’ immunization program and that ending the outbreak was a “top priority” for him and his team.
A man accused of corporate espionage in a scandal rocking the world of HR has confessed to gathering intelligence on one company and passing along information to its rival, according to a new court filing.
Keith O’Brien, who is accused of acting as a spy for HR software firm Deel, submitted an affidavit to an Irish court this week in which he says he was paid by Deel to disclose confidential information about its competitor Rippling, another HR software company. He says co-founder and CEO of Deel Alex Bouaziz directly suggested he keep his job at Rippling and work as an inside man.
“I recall him specifically mentioning James Bond,” O’Brien wrote. “I asked him what he meant. He said he would offer me a monetary award if I agreed to spy on Rippling for Deel.”
Deel did not immediately respond to Fortune’s request for comment. Rippling did not immediately respond to Fortune’s request for comment. Rippling CEO Parker Conrad posted parts of the affidavit on X Tuesday, writing that Bouaziz “personally orchestrated his company’s alleged spy scheme, the spy said in a full confession
O’Brien writes that he was asked to provide Bouaziz with information regarding Rippling’s “ways of doing things” which he inferred to mean corporate strategy, customer insights and other confidential company information. O’Brien says he communicated with Bouaziz multiple times per day, and even on weekends. In November, he says he was awarded $6,000 for the insights he passed along, and continued to receive payments monthly in exchange for valuable information, according to the court filing.
At one point, when Rippling began to suspect that something was wrong, O’Brien claims he was asked by Deel’s legal team to purchase a burner phone from Deel’s lawyers, destroy his old one with an axe, and shove it down his mother-in-law’s drain, according to the court affidavit. He further alleges that he was advised by lawyers for Deel that he should leave Ireland and fly with his family to Dubai, and that Deel would pay for his accommodations.
O’Brien says that in March, he agreed to meet with Rippling’s legal team for an interview, and wrote that he was fearful of his safety “given the power and wealth of the individuals involved.”
“I was getting sick of concealing this lie,” he wrote in the affidavit. “I realized that I was harming myself and my family to protect Deel.”
Entertainment8 years ago