2Jour Gazette | Special edition (12): HERMÈS formula
- Maryna B
- Mar 18
- 44 min read
Axel Dumas appears deeply immersed in strategic development. He operates numbers effortlessly but doesn’t see his work solely as business. This became evident during the presentation. At first, he comes across as a typical businessman, one who thinks exclusively in terms of profit. He wears a perfectly tailored, double-breasted navy suit, buttoned up to the last button. The cuffs of his crisp white shirt peek out from under his sleeves—flawlessly measured at the ideal 1–1.5 cm. His hair is immaculately styled, unmoving. His mind seems cool, his voice following a steady, unwavering trajectory. He follows the slide structure precisely.
Then you notice the playful navy tie.
I'm very proud of our ties, which are not the most costly on the market. They're not worn by everybody.
The moment you notice the tie, the Q&A session begins. Now unbound by the rigid structure of the presentation, Axel Dumas gestures animatedly, enhancing his responses with expressive movements. Beyond numbers—which he effortlessly recalls from memory—something deeper emerges, something beyond mere number-chasing.
If you'd asked me ten years before, I had done some good calculations, saying I'd retire at 65, we'd grow by 7% a year. This led me to a revenue of 12 billion. We thought at that time that it was great and very ambitious. Today, I'm presenting 15 billion.
His statements are expansive. If they start with fact-based answers, those often extend beyond conventional business thinking. Responses are layered, diving into intricate nuances. He leans slightly forward, fully engaged in the conversation. At times, he crosses his arms, as if holding himself back.
My teams tell me to stick to the message, they tell me not to answer questions [that broadly].
Then another answer follows, generously infused with stories and reflections. Despite the expectation of adhering to dry, official commentary, he seems constrained by such a framework. The tightly buttoned double-breasted jacket feels too restrictive. Or perhaps... protective?
INTRODUCTION
It is hard to write about Hermès.
The presentation of the brand’s 2024 full-year results lasted 1 hour and 31 minutes, with the presentation itself taking only 19 minutes—the rest was dedicated to Q&A. For comparison, LVMH’s 2024 full-year presentation lasted 1 hour and 6 minutes, despite covering 75 brands across six divisions. Axel Dumas, the group's Executive Chairman, occasionally glanced at a team member.
I answer the questions that people advise me not to; they tell me to stick to the message,
—he said, yet continued answering them broadly anyway.
During the Q&A session, Axel Dumas, along with Eric Du Halgouët, Executive Vice President of Finance, answered all questions as comprehensively as possible, leaving no room for speculation. Add to this an extensive presentation that considers performance trends over the past ten years, the absence of scandals or internal conflicts that have become public, a stable management and creative team—and the group, intentionally or not, shapes its own narrative.
It might still be too early to provide a complete 360-degree view of the group’s plans, strategies, and current focus areas. The extended version of the results will most likely be published along with the Universal Registration Document by the end of March.
And yet, I still have something to add.
CONTENTS
2.1. Overview.
2.2. Revenue mix trends.
2.3. Country focus: China, Japan, France, United States.
2.4. Retail strategy.
2.5. Summary.
3.1. Leather goods and Saddlery.
3.2. Ready-to-wear and Accessories.
3.3. Other sectors.
3.4. Perfume and Beauty.
3.5. Silk and Textiles.
3.6. Watches.
3.7. Other products.
3.8. Summary.
IDEA LAB: ideas to implement for better performance.
VISUALS
Consolidated income statement, 2024 (*from official presentation)
Revenue change at constant exchange rates in 2015-2024, % YoY
Consolidated income statement, 2024 (*from official presentation)
Net profitability evolution in 2015-2024, % of revenue (*from official presentation)
Revenue by geographical area in 2024 (*from official presentation)
Revenue by geographical area in 2015-2024 (€m and % organic change YoY)
Revenue by geographical area in 2024, % of total (*from official presentation)
Revenue by sector in 2015-2024: change at constant exchange rate YoY
SOME QUESTIONS THIS REPORT ANSWERS (the list is not full):
How does Hermès maintain double-digit growth while competitors struggle with market volatility?
What lessons can other luxury brands learn from Hermès’ category diversification strategy to ensure sustainable growth?
What strategic pricing approach allows Hermès to preserve profitability without aggressive price hikes?
Why is Hermès deliberately limiting store expansion?
What product categories are emerging as the next revenue drivers?
How does Hermès leadership structure foster long-term stability?
Why does Hermès prioritize vertical integration in production, and how does this safeguard long-term brand value?
How is Hermès leveraging digital retail without compromising its exclusivity?
How does Hermès approach to workplace culture?
Who will benefit from this report?
This is a professional-oriented analysis, designed for those with a deep understanding of the luxury industry rather than a broad consumer audience. It offers strategic insights and in-depth analysis, focusing on Hermès group business model, market positioning, and long-term growth strategies.
Luxury brand executives & strategists: insights into Hermès long-term growth model and strategy;
Investors & financial analysts: key financial metrics, profitability drivers, and risks impacting Hermès future valuation;
Marketing & branding experts: Hermès’ unconventional "no-marketing" strategy and its impact on desirability;
Luxury consultants & business analysts: strategic takeaways to advise clients.
*Please note, "the group" refers to Hermès group, encompassing all its sectors, while "the brand" refers specifically to Hermès as a standalone brand.
The presentation style felt both humble and confident, with a balance that avoids both excessive self-praise and false modesty. Hermès definitely had enough to be proud of, representing an industry that remains ever-changing in today’s luxury market.
FINANCIAL PERFORMANCE OVERVIEW
Revenue in 2024 reached €15.2 billion (+15% at constant exchange rates and +13% at current exchange rates). The revenue trend has been positive over the past 10 years, except for the COVID year (-6.0%).
The recurring operating profitability reached 40.54% in 2024, highlighting strong operational efficiency and sustained profitability over the past 10 years.
For comparison:
LVMH's operating margin in 2024 was 23.11% (€19,571 mln / €84,683 mln × 100%);
Kering's operating margin in 2024 was 14.85% (€2,554 mln / €17,194 mln × 100%).
Net income (€4,603 mln) grew 6.77% YoY, reaching 30.34% net profitability. The trend is impressive, rising from 20.1% in 2015, with a positive year-over-year change every year except for COVID-affected 2020.
For comparison:
LVMH's net profitability in 2024 was 14.82% (€12,550 mln / €84,683 mln × 100%);
Kering's net profitability in 2024 was 7.62% (€1,310 mln / €17,194 mln × 100%).
At the end of December 2024, all the regions posted growth and all the business lines except Watches showed solid momentum, supported by the house’s value strategy;
Sales in the fourth quarter amounted to €4 billion (+18% at constant exchange rates and current exchange rates). The Americas saw a strong performance, and the other geographical areas confirmed solid growth.
REGIONAL PERFORMANCE
Overview
All regions saw growth in 2024, though at different rates.
Asia-Pacific (excluding Japan) grew by +7%, marking the slowest growth among all regions;
"Other Markets" (including the Middle East) experienced the fastest growth, though from a smaller base, increasing from 2% of total revenue in 2023 to 4% in 2024;
Japan recorded a significant +23% increase, reinforcing its position as a key luxury market (*what is behind Japan being the latest luxury star in terms of spending wrote here);
Europe (excluding France) showed strong demand, growing by +19%;
The Americas* expanded by +15%.
*Please note that in Hermès' report, The Americas includes countries from both North and South America, rather than treating the U.S. as a separate market, as is commonly done in other reports.
Regional revenue mix trends
Hermès' revenue distribution has shifted over the past decade, reflecting changing consumer demand and global market dynamics. While Asia-Pacific (excluding Japan) remains the largest market, its share is stabilizing, and other regions are seeing adjustments in their contributions.
Asia-Pacific, which peaked at 48% of revenue in 2022, has now declined slightly to 44% in 2024. While still the dominant region, this shift suggests a more measured growth pace rather than the rapid expansion seen in previous years. China remains a key driver, but economic uncertainties and consumer caution have led to slower luxury spending growth. Japan, on the other hand, has maintained a stable 11-13% revenue share over the past decade.
Europe (excluding France) has seen fluctuations, dropping from 19% in 2015 to 13% in 2022, before slightly recovering to 14% in 2024. France, while the core of Hermès' production, has seen its revenue share decline from 14% in 2015 to 9-10% in recent years.
The Americas have been steady, contributing 18-19% of revenue over the years, with the U.S. leading growth.
One of the most notable shifts is the growth of Other Markets. Though still a small portion of total revenue, this segment doubled from 2% in 2023 to 4% in 2024 (mostly driven by the Middle East).
China
Despite economic challenges, China continued to grow in 2024.
All countries, including Greater China, have grown in 2024.
This underscores the group’s resilience in the region, even in the face of a sluggish real estate market and cautious consumer sentiment. According to Axel Dumas, China remains a domestically driven market, with customers preferring to purchase luxury goods within the country.
Chinese customers have bought their products in China, not elsewhere.
However, Axel Dumas remains cautious about the market’s full recovery:
It's a bit early to declare a full market recovery,
—he noted, showcasing a pragmatic outlook on economic conditions.
Japan
Japan continues to be a strong and stable luxury market, driven largely by domestic consumers.
Our success in Japan is driven by Japanese clients,
—meaning that Hermès sales primarily cater to local customers rather than tourists. Unlike other luxury brands and groups that rely on foreign shoppers, Hermès maintains a different market positioning:
Unlike other players, where people buy in Japan, but they're not Japanese, we pretty much sell to Japanese people in Japan.
The group's long-term commitment to Japan remains unchanged, with continued investments in this established market. This approach has led to the opening of two new stores in Tokyo, even though the total number of Hermès locations in Japan is fewer than a decade ago.
France
France plays a crucial role in Hermès' operations, serving as both the heart of its production ecosystem and a symbol of luxury craftsmanship. While 75% of Hermès products are made in France, the country accounts for only 10% of total sales.
The group continues to invest in local artisans, small-scale workshops, and traditional techniques.
We are trying to save, to help the French ecosystem, because you still have a ready-to-wear ecosystem in France.
—Axel Dumas added. Beyond good intentions, I can't not mention a clear profit-driven aspect, as "Made in France" is a core element of the brand's value.
United States
The U.S. has been a key driver of growth in the Americas region, with Axel Dumas describing it as:
[...]very booming [...] Q4 was very strong.
Despite ongoing economic fluctuations, the U.S. market continues to be an area of long-term strategic focus for Hermès. Consumer behavior in the region is often influenced by external factors, particularly exchange rates. A stronger U.S. dollar can drive higher spending abroad, especially in Europe, where luxury prices may be more favorable:
U.S. customers are very sensitive to exchange rates. They'll look at the exchange rate and maybe buy elsewhere.
However, the group remains confident in its ability to maintain strong demand within the region. As Dumas noted, the company has viewed the U.S. as a market with significant untapped potential:
We said four or five years ago... the U.S. remains a market that we need to conquer.
To strengthen its position, it continues to expand its retail presence across the U.S. While some cities have standalone flagship locations, others have multiple stores tailored to different clientele and shopping districts:
Sometimes we have two stores in the same city, like in Miami, and in the LA area, we have three stores.
This clustered store strategy allows to better target local customers and tourists, ensuring consistent brand engagement across key metropolitan areas.
U.S. expansion is not without challenges, particularly when it comes to global trade policies and import duties. The company closely monitors potential changes in tariffs and economic policies, particularly under the current administration. As Dumas noted:
The new American administration is presenting the invoice, as it were, to the net exporters.
Which means the brand (and the group) as a luxury exporter to the U.S., could face higher customs duties on imported goods.
If the customs duty is going up, we increase the price to make up for the customs duty.
This pricing philosophy aligns with the brand’s overall approach to maintaining profitability without relying on promotional discounts or, as they say, aggressive marketing:
We don't have any marketing policy [...] We have increased the price as a result of our increase in cost of production and monetary fluctuation.
While price increases could make luxury purchases in the U.S. more expensive, Dumas remains confident in its customers' brand loyalty and willingness to adapt:
Our American customers will understand, will remain loyal, and those who find it too expensive will come to benefit from our hotel infrastructure in Paris.
The question of the U.S. market remains a sensitive issue. In my special edition on LVMH's 2024 full-year results, I mentioned how newly elected President Donald Trump continues to threaten import tariffs, including on luxury goods from Europe. LVMH CEO Bernard Arnault appears to be navigating the situation in his own way—he attended the inauguration in January and signaled a favorable stance towards the U.S. market, even mentioning subsidies from U.S. authorities for production facilities.
Meanwhile, as I continue to monitor Trump’s latest statements, I also observe the countermeasures being put in place. Canada and Mexico were among the first to be targeted, with a proposed increase in import taxes to 25%. In response, Canada is prepared to introduce reciprocal measures, and many local businesses are independently boycotting American goods on their shelves. As a result, discussions about a 25% tariff have largely subsided, although some level of increase remains possible.
In the context of global trade, things are more complex. Globalization creates a chain reaction, meaning that making threats is one thing, but acting on them without consequences is another. I assume that the countries most directly affected by such statements when it comes to luxury—France and Italy—likely have a Plan B in place should these threats turn into action.
Here, I agree with Axel Dumas, who took a somewhat romantic perspective on the situation:
One of the things that worries me the most is the evolution of geopolitical relations at the moment... We've always had the weakness to believe that, you know, trade brought people together rather than driving them apart. Is that still true? We have the right to believe things in your little corner that others don't believe in anymore.
Despite economic sensitivities and potential trade barriers, Hermès continues to prioritize the U.S. as a core market for expansion. It is currently one of the biggest export regions:
The two big exports is Middle East and America. These are the regions where we've got a larger export client base.
Retail strategy
Axel Dumas emphasizes that success isn’t about increasing store numbers. Since 2013, the brand has reduced its store count from 313 to 293, highlighting a strategic approach:
So it's not by opening more stores that we became more successful and increased fourfold our revenue.
*As of the end of 2023 there were 294 stores in 45 countries (p. 52).
Rather than standardizing store sizes, the focus is on creating balanced spaces that enhance the customer experience and product diversity:
We could have decided to have 500 stores all the same size, but you would only have had small leather goods, which would have been probably not the right way to go.
Since 2010, the company has followed a measured expansion strategy, opening a new store in a new city each year:
That was 15 years ago, and we've been rolling out pretty much the same strategy.
The 2025 openings include Phoenix and Nashville in the US, Florence in Europe, and Shenzhen and Wonzo in Asia. Meanwhile, the Aki Bucha Saibou store in Tokyo will be closing, though investment in long-standing markets remains a priority:
We continue to invest in all our zones, even the long-standing zones like Japan.
The strategy remains focused on quality over quantity, ensuring a thoughtful balance between expansion and maintaining the brand’s exclusivity.
SUMMARY
Global performance:
Hermès continued its strong growth in 2024, expanding across all regions. While Asia-Pacific remains the largest market, its dominance is stabilizing, allowing for stronger contributions from other regions.
Regional highlights:
Asia-Pacific (excl. Japan) remains the top market but is no longer growing as aggressively as before. Its share has slightly declined, indicating a more balanced global distribution;
Japan has emerged as a standout, reinforcing its status as a stable luxury market driven by local customers rather than tourists;
Europe (excl. France) has regained momentum after previous declines, showing a renewed appetite for luxury;
The Americas continue to expand, with the U.S. playing a key role in regional growth;
France remains central to Hermès' craftsmanship and production but accounts for a relatively small share of sales;
The Middle East and other markets have become increasingly significant, experiencing rapid expansion.
Key export markets & strategic insights:
Hermès highlighted that the Middle East and the U.S. are its biggest export-driven regions, meaning that a substantial portion of sales in these areas comes from international shoppers rather than local consumers;
The U.S. remains a major focus, with selective store openings in key cities;
Despite economic uncertainties, Japan and China continue to be priorities, though each market requires a different approach based on consumer behavior;
Hermès' retail strategy focuses on quality over quantity, reducing store count while expanding in high-impact locations.
PRODUCT CATEGORY MIX
The man standing still in front of the window display made me smile. He lingered for a minute or two, shifting his gaze between different objects behind the glass. Hermès window displays are truly different from those we are used to seeing on the well-known streets lined with luxury boutiques. They seem to have a life of their own, drawing you in—not just to take a glance but to become part of their story.
A jacket rushes forward, its tie fluttering in the wind; black boots set off on an intriguing journey; plates take a moment to rest; shadows exhale. In the corner, everything a rider might need to care for his horse, draped in a black saddle, is carefully arranged. You walk further and take in the silk scarves, stretched in improvised frames like true works of art.
This description may seem… well… at the very least, surreal. And yet, the intricate compositions in window displays feel so natural that they almost appear ordinary.
***
Hermès showcases all of its product categories in its displays. However, rather than assigning a separate space for each, everything is presented mixed together. These displays perfectly embody the strategic approach so often referenced during presentations—a balance in which every product finds its place under the spotlight of customer attention.The brand has built a balanced product portfolio, ensuring that growth is not overly reliant on a single category. Over time, the brand’s core product mix has shifted, reflecting the evolving preferences of its client base. Axel Dumas recalled this transformation, noting:
When I did my first internship at Hermès, the turnover was 54% with silk and 9% with leather.
— although I wonder how long ago that was.
Before we take an in-depth look at each category, it's important to consider the definitions. They differ from how other players define their categories, and to better understand the performance of each, it's good to remember:
Ready-to-Wear and Accessories sector includes shoes;
Other Hermès Sectors includes jewellery and home items;
Other Products includes infrastructure and brands like Saint-Louis, silversmith Puiforcat, and men's bootmaker John Lobb.
At the presentation, significant attention was given to how the group is striving to balance demand by expanding across multiple product lines. Rather than relying on a single product to drive performance, the brand follows a broad-based growth strategy.
We don't want one model that drives all of the growth... We want many different items to be successful. [...] Maybe in 20 years, jewelry and shoes will become the primary divisions.
Some time ago, I wrote a broad analysis on product mix across different luxury brands. Out of the list, only two stood out as having the most balanced revenue streams—Hermès and Prada. Well, you’ve seen their results in what has been a significantly challenging 2024. I firmly believe in a sustainable business model that avoids over-reliance on a single product category. While focusing all resources on a high-performing segment may seem like the fastest way to maximize short-term profit, brands choose between two paths—either exploiting that category fully to capitalize on immediate demand or using its success to strengthen other divisions and create long-term stability.
This long-term approach is exactly what I observe in Hermès, and it was a recurring theme in what Axel Dumas kept saying during the presentation:
We want to have something integrated and balanced [...]. We do invest quite a lot, and our objective is to balance out the different divisions.
Expanding on this, he also emphasized the importance of balance even within individual categories, ensuring that no single item dominates sales:
Inside the métier, we want to have some balance too. We don't want one model that drives all of the growth for leather goods, we want many different items to be successful.
LEATHER GOODS AND SADDLERY
Performance overview
Revenue growth
Leather goods and Saddlery remain Hermès' largest category in absolute terms;
Revenue grew from €2.3 billion in 2015 to €6.5 billion in 2024, nearly tripling over the period;
Despite fluctuations, the category has posted consistent year-over-year growth, except for a temporary dip in 2020 due to the pandemic;
Growth rates rebounded sharply in 2021 (+28.9%), then stabilized at 17-18% in 2023-2024.
Revenue share in total sales
The category accounted for 50% of total revenue from 2016 to 2020;
Its share has declined slightly to 43% in 2024, reflecting the expansion of other categories rather than a decline in performance.
Strategic implications
The slight decline in revenue share aligns with Hermès’ diversification strategy, as ready-to-wear and other categories grow at a faster pace;
Despite this shift, leather remains the backbone of the brand, maintaining strong demand and contributing the highest revenue.
Leather goods, particularly the highly coveted Birkin and Kelly bags—often referred to as quota bags—draw significant attention to the brand. Some time ago, I came across an old Forbes article from around 2012 questioning whether demand for the Birkin was fading. The article suggested that customers might be growing tired of this model. Well, more than a decade later, both bags remain in exceptionally high demand.
Both Kelly and Birkin have become true status symbols, something aspirational customers actively seek. In the men’s world, ultra-luxury watches holds a similar position to these bags in the women’s market. While the brand itself is reluctant to comment on this dynamic, it emphasizes the craftsmanship over industrialization, as each bag is entirely handmade by a single artisan—a process that does not allow for large-scale production or automation.
Could production be increased without compromising quality or this approach? Likely, yes. However, an essential element of luxury—and a key driver of sales—is desirability. An unspoken rule for securing a bag faster is purchase history—a topic that has already been widely discussed. I often hear jokes about people buying yet another set of tableware just to improve their chances. To be fair, the tableware is exquisite (oh, particularly the Mosaïque collection). However, there are also those who want nothing but the bag. In fact, two customers recently sued the brand over its selective sales approach, but as expected, the case didn’t lead to much. Still, the event itself was telling.
A friend’s husband was, at some point, willingly drawn into this murky game of chance. He had spent a significant amount over a certain period—exceeding the cost of a non-exotic leather Birkin—only to find that the sales associate was in no hurry to offer him the bag. Frustrated, he caused a scene. Bad for him, he was in Dubai, where, as you may know, in the Middle East market, money is often not counted.
While the brand is frequently criticized for this approach, continuing to stress that they famously have no marketing department, I still have to give them credit. Let’s break down their strategy:
Quality – Unlike competitors, Hermès has never been involved in major scandals regarding craftsmanship. Recently, rumors circulated that Dior bags were being sewn under poor conditions in Milan, while Chanel significantly raised its prices yet switched to cheaper hardware and faced concerns over stitching quality. Whether Hermès even has competitors is a separate discussion.
Our cost of goods in leather is sometimes much higher than the selling price of some bags
A delicate play on human nature – The thrill of the chase, the desire to appear rather than to be. The illusion is masterfully constructed: the bag is right there, seemingly within reach. Inside every boutique, behind the glass, stands a coveted model in an irresistible, deep, desirable shade. Looking is allowed, but purchasing? That requires effort. Or, perhaps, you have to earn it.
That all attracts a diverse and engaged client base.
Our leather client base is a bit broader and more diverse [than for RTW].
Hermès has successfully translated the demand and prestige of these bags into growth across other categories. Of course, it’s not just about the bags, but their role in shaping the brand’s success is undeniable.
Idea 1. From 1988 to 2010, Hermès released limited-edition bag charms called Cadenas, resembling the original bag lock. Each year, a new Cadenas was introduced, reflecting the annual theme—similar to how scarf prints are designed.
These locks were discontinued due to a lack of demand at the time, but I am certain that if the idea were revived today, Cadenas would undoubtedly become a bestseller.
READY-TO-WEAR AND ACCESSORIES
Performance overview
Revenue growth
The category has seen steady expansion, with revenue rising from €1.1 billion in 2015 to €4.4 billion in 2024—a nearly fourfold increase;
Growth was particularly strong in 2021 (+58.8%) and 2022 (+36.0%), indicating a surge in demand post-pandemic;
In 2023, growth slowed to +28%, and further to +15% in 2024, but remains one of the fastest-growing segments.
Revenue share in total sales
The category accounted for 23% of total revenue in 2015, maintaining a 21-23% share until 2020;
From 2021 onward, its share expanded, reaching 29% in 2023-2024, highlighting its growing role within the business.
Strategic implications
The increase in revenue share suggests RTW is becoming a more significant driver of growth, reducing dependence on leather goods;
The post-2021 acceleration indicates a shift in consumer demand, with fashion playing a larger role in Hermès’ overall sales mix;
While growth slowed in 2023-2024, the category remains a key contributor to revenue diversification.
Historically, RTW played a supporting role to the brand’s leather goods business, holding a stable share of around 23% of total revenue until 2020. However, over the past few years, its importance has increased significantly, reaching 29% in 2024. This steady rise signals a broader diversification effort aimed at strengthening Hermès’ position beyond its signature leather craftsmanship. The expansion of this category has also allowed Hermès to attract new clients, with Dumas remarking,
We've probably won them [clients] over from others, both women and men.
Hermès RTW stays away from trends. It is high quality, deeply connected to the brand’s heritage and artistic vision, yet the main focus remains on clean lines. Combined with bold—yet still restrained—prints, the clothing avoids being overly plain, though I would still describe it as conservative. Silk and leather are frequently used materials, reinforcing the luxurious feel.
Pricing is significantly higher than most other brands on the market, likely comparable to Loro Piana. In the previously mentioned LVMH edition, I confidently suggested that if Loro Piana had a true competitor, it could very well be Hermès. Or the other way around.
Nadège Vanhée-Cybulski, before joining Hermès as the artistic director of women’s ready-to-wear, spent three years working alongside the Olsen sisters at The Row. During her tenure there, she greatly influenced the brand’s aesthetics. So, if you happen to notice similarities between the two brands (there is a joke that Olsen sisters make their own Hermès), it may not be just your imagination.
Before The Row, she also worked with Phoebe Philo at Céline and at Maison Margiela. Just like Hermès itself, Nadège Vanhée-Cybulski avoids the public spotlight in the most direct marketing sense, though there are still a few interviews and articles featuring her in the press.
That being said, Hermès clothing breathes wealth. It is understated, elegant, and far from flashy. Perhaps that’s why, as Axel Dumas noted:
For ready-to-wear, I think that our clients are slightly more exclusive, a bit more resilient, and there are more of them.
This is not the go-to choice for trend followers, but rather for those who have nothing to prove—especially not through visible logos. As I review this text before publishing, I still have a fresh impression from the Fall 2025 Women’s Collection at Paris Fashion Week. The collection won’t make waves; it looks familiar. A lot of leather, knitwear, and occasional bursts of eclectic green among classic black, gray, and chocolate tones. Yet, it effortlessly breaks down into wardrobe essentials that remain relevant beyond shifting trends. Outfits can be purchased as complete looks or as individual pieces, without worrying that they will soon go out of style. There is a certain mindfulness and longevity to this approach.
*2Jour Stylist unretouched Hermès lookbook is here
As for the brand’s plans to expand into haute couture, I remain cautious, if not outright skeptical. It turns out that what was stated in the Financial Times interview was more of an improvisation than a well-thought-out strategy—quite surprising, considering Hermès' commitment to long-term planning.
I say this honestly. Are we thinking about it strategically or not? I'm not so sure. But once we've said it, we thought that was a good idea [...] I thought that the teams are going to get angry with me, saying, 'What did you say?' And they said, 'Oh, very nice. We've been thinking about it for a long time.'
The first collection may be out in 2026 or 2027:
I guess 2026 will try the time that is put in place. But if it's 2027, why not? You know, the idea is to do things well.
Couture makes me think about goals beyond to do things well. What could these collections look like? If we take RTW as a reference, they would likely be leather-focused and texture-playing. That’s probably the most realistic expectation. The brand has never been known for heavy embellishments, dramatic shapes, or overly intricate silhouettes.
Another question is—for whom? Couture is closely tied to red carpets and collaborations with celebrities. Many brands, even those with full-fledged couture lines, rely on this strategy to boost visibility. Others, like Prada, Miu Miu, and Louis Vuitton, create custom pieces for A-listers without an official couture division. How relevant is this approach for Hermès? Would stepping away from its long-established and highly successful strategy of avoiding celebrity endorsements be the right move?
Staying within this sector, it’s worth paying attention to footwear. Bouncing sneakers and sandals like Oran, Izmir, Chypre—in my unverified-by-figures opinion—have likely contributed a solid share to overall revenue. These easily recognizable models, offered at a relatively accessible price point, have been embraced by those wanting to be part of the brand’s community without a significant financial effort. I recall that just a few years ago, some of these styles were quite difficult to purchase (arifisial scarcity or demand exceeding supply?), but now—judging by the online store—they seem widely available in various sizes, with plenty of options. For another brand, such widespread availability of a trendy product could lead to a loss of exclusivity, making the brand feel too common. When something becomes overly accessible, it often loses its appeal.
Hermès still has plenty of other footwear offerings in its portfolio, with Hermès investing in manufacturing infrastructure to support its expansion. The brand has established a dedicated production unit in Italy, allowing for greater capacity and quality control:
In shoes, we have a real production unit in Italy, which is growing, we have capacity 200 people
—Dumas noted. This is one category that I wish was modernized slightly in terms of designs—without compromising its core heritage-driven strategy.
Apart from that, I would also consider:
Eveningwear—Loro Piana recently expanded its offering in this segment, and while LVMH traditionally doesn’t disclose sales figures, the designs themselves turned out quite well. Before making a full commitment to haute couture, Hermès could test the waters by introducing a few select eveningwear pieces per season (idea 2).
Denim—A few signature models per season would be enough. Not only for the reason mentioned above (attracting a broader audience), but also because denim is a fundamental piece in nearly every wardrobe, offering a relatively low entry point into the brand. Hermès has occasionally included jeans in both men’s and women’s collections, but they tend to be rather plain and not particularly different from others in the same price range (idea 3).
Suits—Watching Axel Dumas in his impeccably tailored jacket, I couldn’t help but think that this could be another area for expansion. As with eveningwear and denim, I wouldn’t recommend going all in—just a few models per season. What would a Hermès suit look like? A mix of Zegna, Dior, and classic Brioni tailoring (idea 4).
Kidswear—The brand already has a small children’s segment, including baby clothes, toys, and textiles. I have no doubt that there would be plenty of parents eager to introduce their children to Hermès from an early age. A well-crafted and unique kids’ line could find great success. And given the demand for sneakers, parents would likely be lining up for a Bouncing version to complete a family look (idea 5).
The last but not least—eyewear (idea 6). I have no idea why the brand still doesn’t offer this essential wardrobe piece. It’s definitely more aspirational in terms of pricing, but, oh, Hermès sunglasses already sound so good! The reason for the delay might be the brand’s traditionally slow, or perhaps even somewhat reluctant, approach to reacting to trends. Speaking about Hermès’ measured approach to market shifts, Axel Dumas noted:
We are not specialists in seizing opportunities swiftly.
Another reason for ignoring this sub-category might be the brand’s serious and meticulous approach to any new developments—something we’ll touch on later in the context of beauty. Or maybe it’s the significant investment required for eyewear production. The way the luxury eyewear market operates is typically through either a licensing model—where companies like Luxottica handle production for brands such as Chanel, Prada, Miu Miu, and Brunello Cucinelli—or in-house production. LVMH, for example, owns Thélios, while Kering has Kering Eyewear. Interestingly, Kering’s division not only produces eyewear for its own brands, such as Gucci, Saint Laurent, and Bottega Veneta, but also collaborates with another luxury group, Richemont, managing eyewear for Alaïa, Cartier, and other Richemont-owned brands since 2017.
Given Hermès’ meticulous approach, which includes maintaining control over all production stages, the brand would likely take on in-house production, requiring substantial investment. The real question is whether these investments would be greater or smaller compared to launching a Haute Couture line. I’d bet on the latter, but the impact could be much broader—just look at the growing Perfume & Beauty division, which could attract a similar to eyewear audience.
If we consider eyewear as a luxury market category, it’s comparable to high-end perfumes—luxury, but still accessible. In the struggling Kering Group, in 2024 Kering Eyewear was not only the strongest-performing division in terms of organic revenue growth (+8%) but also one of just two sectors to show positive growth (the other being Bottega Veneta at +6%).
OTHER SECTORS
Performance overview
Revenue growth
The Other Hermès Sectors category, which includes jewelry, home goods, and tableware, has seen steady growth over the years;
In 2024, it generated €1.909 billion, accounting for 12% of total group revenue;
While smaller in scale compared to other métiers, this category has experienced consistent expansion, reflecting Hermès’ diversification strategy beyond its core leather and RTW businesses.
Revenue share in total sales
The category’s share of total revenue has grown from 7% in 2015 to 12% in 2024.
This sector was only briefly mentioned in the context of haute jewelry, but before we get to that, I’d like to say a few words about Home and Tableware. Or maybe just Tableware, as the home collection, in terms of design, often feels like an overpriced Scandinavian style—good, but nothing special.
Tableware… oh, that’s a different story. Since purchasing yet another cup set is often seen as a step towards eventually getting a Birkin, this sector has become the subject of many jokes. Anyway, I find Hermès tableware to be one of the best among luxury brands that have expanded into lifestyle.
The latest addition, Karoumi, is described as "a collection of fruit ready to be tasted." Cherries, apples, bananas, kiwis, and other juicy fruits are meticulously drawn on white porcelain. As I write this, I feel like I need a bite.
As far as I know, in tableware, the group works with distributors to reach wider audiences. I could write a completely separate article on this question, given my experience developing my business 2Jour-Concierge.com, which offers luxury lifestyle items. In short, developing this business may be more complicated, as the customer base usually includes both individual customers and businesses, mostly in hospitality. So when the sector is not a core focus for the brand, it’s a great idea to have it added to a distributor portfolio. For the record: I am ready to add Hermès Home collections to 2Jour Concierge portfolio too (idea 7, sponsored by me).
Hermès also has a modest collection of glassware and cutlery. I’d assume that if the brand had a marketing department and was more responsive to trends, they could have launched a limited edition of crystalware in collaboration with Saint-Louis, the oldest crystal maker in Europe, which is part of the group. Similarly, a cutlery set with Puiforcat would seem like an obvious move (idea 8). Let’s hope this idea gets heard—especially since some cross-promotion strategies are already in place, as I previously mentioned in the context of shared retail space placement.
As for jewelry, the Maison may have its own Cartier Juste un Clou. For a few seasons in a row, the Farandole necklace and matching-style ring have won the hearts of trend-driven fashionistas. Hermès has a longstanding presence in silver and gold jewelry. The brand first introduced silver jewelry in 1927, drawing inspiration from equestrian motifs and leveraging its expertise in metal craftsmanship. This was followed by the gold jewelry collection in 1976.
Building on its jewelry expertise, Hermès formally entered the haute bijouterie segment in 2010, marking its expansion into the highest tier of jewelry craftsmanship. Its approach to haute bijouterie is deliberately distinct, reinforcing its philosophy of craftsmanship and design-led creation rather than following traditional high jewelry conventions.
We don't say haute jewelry, but we say haute bijouterie. We remain bijoutier.
Unlike heritage jewelry houses that build around rare gemstones, Hermès’ haute bijouterie is shaped by a design-first approach—where form, intricate detailing, and craftsmanship define the final piece. Paving and sculptural elements play a central role, setting Hermès apart from the more stone-centric focus seen in traditional high jewelry maisons.
Behind the idea of haute bijouterie is the idea that we are quite different from Place Vendôme, which starts from a big gemstone and works around it. We base ourselves on the design—there’s a lot of paving, there’s a lot of drawing design, and then they put it in shape. So it's a bit different as an approach.
The pace of creation remains measured, with collections presented every two years rather than following seasonal fashion cycles. This approach ensures that each launch is treated as a standalone event, free from external pressures.
For me, the time of creation is very important too, because our collections, every time at our scale, are a small event. So it mustn't be with too many constraints. We're lucky with haute bijouterie to be off the fashion calendar, so it must have sense.
While there is consideration to accelerate the frequency of new launches, the emphasis remains on organic creative development rather than market-driven planning. As Axel Dumas highlighted, Hermès does not approach haute bijouterie with a structured marketing strategy or forced expansion.
Yes, there'll be more and more, but only if it’s something that we like… There’s no marketing plan behind this.
PERFUME AND BEAUTY
Performance overview
Revenue growth
The category has steadily expanded, with revenue increasing from €241 million in 2015 to €535 million in 2024—more than doubling over the period;
Growth was strongest in 2021 (+46.5%) and 2022 (+15.0%), reflecting heightened consumer interest in beauty products post-pandemic;
In 2023, growth slowed to +12%, and further to +9% in 2024, though it remains positive.
Revenue share in total sales
The category represented 5% of revenue in 2015, maintaining a 4-5% share throughout the decade;
Despite absolute growth, its share has remained stable, reflecting measured expansion rather than aggressive scaling.
Strategic implications
Perfume & beauty remains a small but growing segment, contributing to the brand’s diversification strategy;
Growth has moderated post-2022, indicating a shift towards a more stable trajectory after an initial expansion phase;
While not a major revenue driver, it plays a role in brand visibility and customer acquisition, reinforcing Hermès' presence in the broader luxury market.
It is very aesthetic. My friend, who, unlike me, is a true beauty junkie, shared her thoughts when I gifted her a Hermès lip gloss. Usually, she never talks about the packaging of a beauty product—she skips straight to the feel and properties. However, in the case of this gloss, she started with the packaging.
The bottle truly deserves attention. Adorned with the fashion house’s symbol on the cap, it feels slightly different from the usual cosmetic products, including those where the beauty line is just an addition to the main categories like fashion and bags. It feels more expensive.
Attention to cosmetic packaging not only allows these products to be placed on a separate stand in a boutique (usually, in other brands, only luxury perfumes with a high price tag are displayed this way) but also proudly showcases them in the window alongside other representatives of the portfolio.
This became the second gloss in my modest makeup bag—or, as it is called on the website, Infused Care Oil—that I keep on a permanent basis. Mine is in the shade Rose Kola, and it really does smell like the well-known drink. Unexpected, isn't it? The second gloss I have remained faithful to since my university days—more than ten years—is Dior Maximizer. However, when choosing one to gift my friend, I went with Hermès—because it is more aesthetic.
Before the gloss, I had already added a lip tint to my set after a recommendation from a client. Housed in a heavy case with metallic inserts, its cap is also decorated with the house’s symbol.
***
Hermès entry into the beauty market was gradual. It all began with fragrance. Below is the chronology:
Perfume
First introduced in 1951 with Eau d’Hermès, marking the brand’s entry into the fragrance industry;
The Hermessence collection debuted in 2004, emphasizing exclusive, artisanal scents (I used this line as one of the examples in my case study on how to sell luxury perfumes online here);
The Twilly d’Hermès line launched in 2017, targeting a younger audience.
Beauty
Hermès officially entered the beauty market in 2020 with the launch of Rouge Hermès, a lipstick collection;
The Hermès Plein Air collection (complexion products) expanded the category in 2022;
The Le Regard Hermès (eye makeup) line launched in 2023.
So, it took two years to expand into the complexion category, and another year to add eye makeup. Clearly, Hermès is not chasing TikTok trends in cosmetics. It is creating something of its own.
This cosmetics line is truly not for everyone. And it’s not even about the rather limited range or the fact that the products are quite safe. Or, I would say, understandable and simple—in the best sense of the word, because with Hermès cosmetics, it’s hard to go overboard. The price tag is significantly higher than that of Dior, Armani and Chanel—brands where cosmetics function not as an accessory but as a tangible expansion of their portfolio within the brand. This makes Hermès cosmetics not mass-market oriented but rather niche.
Am I willing to pay one and a half to two times more? Yes. It’s not just about luxurious packaging, which is a pleasure to take out of my bag, but also about the product properties—the ones I’ve tested, I definitely liked.
Hermès seems to view this category as quite promising. And no wonder—the profit from Perfume and Beauty in 2024 amounted to €535 million, surpassing Bottega Veneta, whose—shall we say, modest?—profit stood at €484 million.
Their promotional strategies differ from the usual no-marketing policy, both in terms of sales channels and marketing itself. Marketing, as we’re not used to seeing it—Hermès Beauty occasionally pop up from bloggers and influencers. It’s not all-encompassing, but it does indicate that the brand is working on increasing recognition in this cateagegory.
Speaking of sales channels, it’s not just about leveraging their own infrastructure—meaning their official website and boutiques—but also about setting up beauty counters in department store beauty sections (selectively, primarily in malls catering to luxury shoppers). Besides that, relatively recently, Hermès Beauty started appearing on online retail platforms. The first time I noticed the brand online was at Selfridges. That wasn’t particularly surprising, since their cosmetics were already available there offline. Then came Moda Operandi and Net-a-Porter (the latter, to my disappointment, stopped selling beauty in 2025). And just recently, to my surprise, I spotted it on Cult Beauty.
What does this expansion indicate? Simply that, unlike Louis Vuitton, which recently made a grand announcement about launching a beauty line this fall, Hermès sees beauty as more than just a stepping stone to, as LV put it, “adding another entry point into the brand.”
The enthusiasm of Axel Dumas for the category is clear:
I am very excited with the success of beauty.
After expanding into makeup, the brand is now setting its sights on skincare—but, true to its ethos, it won’t be rushed.
We have to find the right way of doing it,
—he noted, emphasizing the need for a thoughtful, methodical approach to skincare development, including laboratory research. Dumas even mentioned his own role in the process:
I’ll test it on myself to see whether we want to commercialize it or not.
Just in case you need someone extra to participate, Hermès—I am in.
SILK AND TEXTILES
Performance overview
Revenue growth
The category has grown from €442 million in 2015 to €950 million in 2024, more than doubling over the period;
Growth peaked in 2021 (+49.1%), reflecting strong post-pandemic recovery, but has since slowed.
In 2023, revenue increased by +16%, followed by +4% in 2024, signaling a more stable growth phase.
Revenue share in total sales
Silk & textiles accounted for 11% of total revenue in 2015, but its share has gradually declined to 6% in 2024, as other categories have expanded more rapidly.
The category maintains a visible presence in the overall mix. This is due not only to its iconic status within the brand’s heritage but also because of its relatively lower price point compared to other Hermès products, making it accessible to a broader client base.
Beyond scarves, home textiles have found their own place in the world of luxury. The throw with the H motif has quietly become a status symbol, effortlessly blending into high-end interiors.
WATCHES
Performance overview
Revenue growth
The watches category experienced significant expansion over the past decade, growing from €157 million in 2015 to a peak of €540 million in 2023;
However, in 2024, revenue declined by 4%, marking a shift after years of consistent growth;
Prior to this drop, the category had seen strong post-pandemic recovery, with +72.3% growth in 2021 and +23.5% in 2022, followed by more moderate growth of +13% in 2023.
Revenue share in total sales
Watches accounted for 3% of total revenue in 2015 and maintained a 3-4% share over the years.
In 2024, with the revenue decline, its share dropped slightly, suggesting a slowdown in momentum compared to other growing categories.
The 4% decline in Hermès' watch category in 2024 reflects broader market trends and competitive pressure rather than a fundamental weakness in the brand’s strategy. The luxury watch market has slowed after the 2021-2022 boom, as consumer spending normalizes. Economic factors, including exchange rate fluctuations and inflation, may also make watches a more discretionary purchase.
Competition is another factor. Legacy watchmakers dominate the market, attracting collectors with strong resale value and deep horological heritage. Which means Hermès watchesv operate in a niche where traditional Swiss brands remain the preferred choice for many buyers.
OTHER PRODUCTS
Performance overview
Revenue growth
The other products category, which includes Saint-Louis crystal, Puiforcat silversmithing, John Lobb bootmaking, textiles, tanneries, and bespoke creations (Ateliers Horizons and petit h), has shown modest but steady growth over the years;
Revenue increased from €209 million in 2015 to €337 million in 2024;
Growth peaked in 2021 (+29.1%), followed by +8.0% in 2022, +5.0% in 2023 and +9.0% in 2024, indicating a more measured expansion phase.
Revenue share in total sales
Other products accounted for 3% of total revenue in 2015 and have remained within the 2-3% range over the years.
Despite absolute growth, the category’s relative share has slightly declined, as other métiers, such as RTW and beauty, have grown at a faster pace.
I often stop near the Saint-Louis corner in Harrods. The creations of the oldest European cristallerie sit next to Puiforcat and Hermès, and their catalogs share a single sticker with one phone number for all three brands. These crystal glasses are truly next level. Their high price point requires a client who not only appreciates true craftsmanship but also has most of their other needs covered to afford Saint-Louis.
Seeing this sector account for just 2% of revenue in 2024 makes me slightly sad—true beauty deserves more recognition. I had my hands on a full Saint-Louis catalog, and trust me—it’s worth visiting at least the website. Or maybe that’s the point—to remain known only to a select few?
That philosophical note aside, the other products category today plays more of a brand-enhancing role, reinforcing Hermès’ craftsmanship legacy, while divisions like Ateliers Horizons and petit h reflect the house’s creativity and sustainability initiatives.
As for possible expansion in terms of acquiring new brands into the portfolio, Axel Dumas noted:
We might need capital to beef up our vertical integration, because that is important to us now. I don't want to say, t's never going to happen, but it's not our priority right now to buy up companies [...] I'm not sure we know how to do anything else. I'm not sure that we could buy up another company and impose on it the Hermès model.
SUMMARY
Balanced portfolio strategy
Hermès has carefully built a well-balanced product mix, ensuring its growth is not overly dependent on any single category. The brand strategically presents its entire range in window displays, blending different products together rather than separating them—mirroring its approach to business diversification.
Key categories & performance highlights:
Leather Goods remain the core of the brand, continuing to grow steadily despite a slight decline in revenue share. The exclusivity and craftsmanship behind signature bags like the Birkin and Kelly keep demand exceptionally high;
Ready-to-Wear & Accessories have gained importance, expanding their share within the business. Hermès' understated, timeless designs attract a clientele that values discretion over trends;
Jewelry & Watches follow a unique creative approach, with fine jewelry focusing on design rather than large gemstones. Watches have seen a recent slowdown, reflecting broader industry trends;
Perfume & Beauty is expanding steadily, gaining visibility both within Hermès’ own stores and through select retailers. Future plans include skincare, though the brand is taking a deliberate, long-term approach;
Silk & Textiles remain a signature category but have seen a gradual decline in share as other areas grow faster. Iconic scarves and home textiles continue to play an essential role in brand identity;
Home & Tableware attract both loyal clients and newcomers, with fine porcelain and glassware serving as accessible entry points into the brand.
Strategic shifts & future outlook:
Hermès aims to avoid relying on a single best-seller, ensuring multiple categories contribute to overall growth;
While haute couture is being explored, it remains an uncertain project, highlighting Hermès’ cautious approach to expansion;
Potential new product areas, such as eyewear, eveningwear, and an expanded kids’ line, could further diversify the business in the future.
Hermès’ strength lies in its disciplined expansion, focus on craftsmanship, and ability to maintain desirability without overexposure. Its strategy reflects a commitment to diversification over specialization, including risk management—ensuring that no single product, no matter how iconic, dictates the overall performance of the brand.
E-COMMERCE AND DIGITAL STRATEGY
E-commerce was not mentioned during the presentation, but as it remains my key professional focus, I’d like to dive deeper. Hermès e-shop, which at the beginning of 2024 was available in 30 countries,(p.52), ranks in my top three list of best heritage-focused platforms. I evaluate websites from two main perspectives: heritage and technical execution, which includes client experience, display, and policies.
While luxury brands were hesitant about online retail for a long time—often reducing their digital presence to a standard commercial layout—Hermès took a different approach. From font choices, color palettes, and photo styles, the site feels unique and distinctly Hermès while still delivering a seamless digital experience.
When Axel Dumas pointed out the wordplay between "jewelry" and "bijouterie," this play on language—or rather, this attention to detail—actually extends to the website as well. Instead of standard phrases like "Complete the outfit," Hermès invites customers to explore "The Perfect Partner." Instead of "You might also like," visitors are encouraged to "Keep exploring." These small but thoughtful details enhance the overall experience, making the digital journey feel more personal.
The technical side of the website is not yet perfect, and there is still room for improvement to bring the online experience to an even higher level. While a more detailed review could be left for a separate project, here are a few suggestions:
1. Beauty: enhancing customer confidence with reviews (idea 9)
Beauty customers tend to research products before placing an order, often looking for reviews on external blogs or third-party beauty retailers like Cult Beauty. Adding a review section directly to the beauty segment of the Hermès website would significantly increase customer confidence and organically boost online beauty sales.
2. Expanding personalization options (idea 10)
While researching, I came across an interesting detail in one of Axel Dumas photos (oh, this eye for detail)—his leather document folder was personalized with his initials. Personalization is something Hermès is already familiar with, especially in the context of special-order bags. However, expanding this service to include beauty, RTW, and leather accessories could be both a customer satisfaction and elevated journey driver and a revenue opportunity if offered as a paid service.
MARGINS, VALUE CREATION AND PRODUCTION STRATEGY
Rather than making decisions based on maximizing profitability, the group sees margins as a consequence of strategic choices, not the driving factor behind them.
We never make any decisions on the margin. The margin is a consequence of our strategic decisions.
This philosophy extends to pricing as well. While many luxury brands rely on premium pricing for their most desirable items, Hermès maintains a consistent margin across all products, ensuring that no single item is disproportionately more profitable than another.
We try to have the same margin everywhere, so that you don't have more margins on the desirable product than on the one that is harder to sell.
Unlike some market participants who drive revenue through aggressive price hikes or broad market expansion (I’m sure you've seen one of the numerous comparisons of price hikes on certain luxury bags over the years), the group avoids a price-driven growth model. Instead, it adjusts prices in response to tangible factors such as rising production costs and monetary fluctuations.
We don't have a growth policy by price or scope [...] We have increased the price as a result of our increase in cost of production and monetary fluctuation.
The brand has implemented gradual and controlled price increases:
We've done over the year 6 to 7% price increases.
Growth is not dictated by volume expansion either. While production may scale gradually, the brand avoids mass production or volume-driven strategies:
We can't follow volume as such. That doesn't mean we won't grow in volume. [...] The success of Hermès is that we don't do that much volume.
The group has been increasingly focusing on gaining more control over its production in recent years by heavily investing in its own facilities. This not only allows for organic volume growth but also enables better oversight of two critical factors in the luxury business: quality and production timelines.
The latter is a common challenge, especially for smaller brands—no matter how strictly contracts are set, independent manufacturers often operate on their own schedules. This can disrupt a brand’s retail calendar, making it difficult to balance demand. After all, there is a fine line between being exclusive and being unavailable, and even Hermès needs to work to have more influence over it.
In recent years, the group has made several strategic production investments, including:
Riom (Puy-de-Dôme): In September 2024, Hermès inaugurated its 23rd leather goods workshop in Riom, employing 250 artisans trained in-house. Located in a renovated historic site, the 7,000 m² facility integrates sustainability features like natural light and urban heating. This expansion strengthens Hermès’ French production network, with more workshops planned in L’Isle-d’Espagnac, Loupes, and Charleville-Mézières;
Charleville-Mézières (Ardennes): Announced in April 2023, this upcoming workshop is set to create 280 jobs by 2027, further enhancing Hermès' production capacity in the region;
L'Isle-d'Espagnac (Charente): Hermès is set to open its 24th leather goods workshop in France in 2025, employing 260 artisans. The site will be part of the South-West hub, alongside workshops in Montbron, Nontron, and Saint-Junien;
Loupes (Gironde): 25th leather goods workshop in France is set to launch in 2026 with 260 artisans. This marks the second production site in Gironde, reinforcing the brand’s commitment to craftsmanship and regional employment. The site will feature solar panels, geothermal energy, and rainwater recovery, reinforcing sustainability. Recruitment will be supported by the École Hermès des savoir-faire and local partners.
LEADERSHIP, DECISION-MAKING AND WORKPLACE CULTURE
Speaking about a dedicated production unit in Italy, Axel Dumas mentioned something unusual to hear. If you've been following the industry lately, there have been quite a few scandals regarding poor labor practices. The loudest involved Dior and Armani (I analyzed Dior's PR response here). The reason this happens is that, in their efforts to attract subcontractors to meet production volume targets, brands often fail to oversee the entire process to ensure it adheres to set standards.
We need to have production units that remain at a human scale. Because when you have 300 people, you know everybody's name, and you can have a chat with them. We know that if we had leather goods production units with 500 people, productivity would go up. However, it is important for us to keep this kind of human scale.
In other words, the group chooses to maintain control and personal connections, even at the cost of limiting production (or revenue). While scarcity is part of Hermès game, there is a fine line between being exclusive (or limited) and simply unavailable. Writing about my personal perception of the Dior bag scandal, I mentioned that I understand the rules. Well, Hermès is here to set its own rules. Axel Dumas went on to add:
We've created 2,300 new jobs this year [2024], which means that at least three out of every 1,000 employees are newcomers—replacing those who retired, etc. So how do we keep this culture going?
Currently, Hermès group employs around 25,000 people. Every single employee will receive a €4,500 annual bonus. Last year, it was €4,000. With such a socialist approach, it’s no wonder the group is called the most French of all fashion houses. Of course, employees also receive bonuses based on KPIs, but there is no doubt that additional incentives—referred to as "share in success"—increase loyalty. Maintaining a distinctive corporate culture is one of the key challenges Axel Dumas identifies in the group's success:
People are really at the heart of Hermès [...] If we sacrifice people, then we lose the whole magic of Hermès.
Following up, he emphasizes the great attention they pay to recruitment:
We recruit a lot of people, and we want, we need, to be able to know who is suited to work at Hermès [...] We've invested heavily in training and in imparting our culture to newcomers.
You may, of course, take all this as romantic blah-blah, with nothing to do with numbers and business. But in a world where people are getting tired of artificial experiences and leaning toward something more intimate and unique, this might actually be the key to financial success.
If you've ever had an experience at Hermès, I must say—it depends. Sometimes you might feel a subtle up-and-down glance and an invisible challenge: Prove yourself. But for the most part, I’ve had good experiences with SAs, especially in department stores, where sections are spread across different floors, making it clear that you’re not searching for a Kelly bag in the tableware department, hah.
Once, I was buying my favorite lip gloss at a stand-alone boutique, and I was impressed by how sweet the sales associate was. I felt like I was spending a fortune, yet she treated me with extra samples and a pouch for the lip gloss, in the best traditions of proper cosmetic shops. I should mention that I don’t chase bags, nor do I have a dedicated SA and find it extremely draining to try to build a relationship with an SA at every single brand. This led me to the idea of a single concierge service within a luxury group, which I shared before—one person who could assist with all orders across the brands within the portfolio.
Anyway, Hermès seems to remain a place for people with a different perspective, creating a unique corporate culture:
We need to continue to work with characters, with people who don’t really necessarily fit in anywhere else.
Axel Dumas, a great-grandson of Émile Hermès, seems to be highly involved in the business while maintaining a creative and somewhat ironic approach to his role. His mentions of retirement suggest that he is not clinging to power but rather focused on adding real value to the group. His distinctive style—casually discussing plans and strategies for a business generating over €15 billion in annual sales—delicately implies that for him, it’s not just about numbers and profit. I would even dare to call it love for the company and what he does—something often lost in luxury when brands scale up, gradually diluting the essence of luxury itself.
Judging by certain comments, the management style within the group is democratic.
We are very Japanese. There's a lot of chats, a lot of oral tradition, and we try and find a consensus.
Axel Dumas frequently references his team, emphasizing that no single person is solely responsible for key decisions:
If you ask who's got the final cut, we can't answer that question.
At the same time, the group seeks to give more autonomy in decision-making at the local level. This suggests a high degree of trust, decentralization of power, and greater managerial responsibility.
I think a company is only as good as its managers work, and the middle managers work as well.
This distributed decision-making approach also extends to different departments and regional markets.
We need to avoid bureaucracy at all costs [...] The different divisions are independent. The countries are very independent.
So while the group acknowledges that it moves slowly when reacting to market trends, it appears that tactical decisions in the short term are made more swiftly, allowing the company to remain agile. Lack of flexibility and excessive layers of approval often become a major obstacle in large corporations—and sometimes even in mid-sized ones.
Pierre-Alexis Dumas, a sixth-generation member of the Hermès family, holds the position of Artistic Executive Vice-President and is also part of the Executive Committee of the group. Not long ago, he gave a widely discussed interview in which he not only offered a rare glimpse behind the scenes of production but also explained why it is so difficult to buy an Hermès bag. One of his remarks on pricing briefly became a viral moment on social media:
I’ve always heard that Hermès is very costly. It’s not expensive,— he raised an eyebrow and paused, — it’s costly.
While the interview may have been controversial, it was impossible to ignore the passion—and again, love—which was undeniable to see in what he does. And while Pierre-Alexis Dumas comes across as a highly creative individual deeply immersed in the design process, the fact that he is also a member of the Executive Committee highlights how seamlessly art and business intertwine within the group.
This structured division of roles within the Hermès family also seems to have mitigated any potential competition among heirs. It feels like everyone is in the right place and no one is trying to pull the power struggle card.
MARKETING, COMMUNICATION AND COMPETITORS
Of course, the presentation could not go without mentioning that at Hermès, marketing is the 17th department, emphasizing that sales happen not because of clever tricks by marketers but because of the products themselves.
We don't do marketing, we don't try to create an illusion.
Representatives of the group say this so often that it has practically become a marketing strategy on its own.
Hermès does not like to talk about competitors—perhaps this is also a communication strategy, or maybe they simply believe they have none. Competitors exist nonetheless, even by definition—brands that offer products with similar attributes. About them, all that was said was this brief statement:
Some people want to do a bit like Hermès, but it doesn't really work out at the end of the day, because the success of Hermès is down to the things that we do really well, and then the things that we do really badly, but it's all balanced out and gives us this kind of unique positioning.
A quick look at their current job openings also confirms that they do monitor the market, especially in the search for best practices in beauty.
Still, the company does have a communications department.
A striking difference in the brand’s communication is that they do not use celebrity ambassadors or collaborate with influencers in the broad sense of the term. However, in any interaction with the public, the focus is placed on craftsmanship and the mastery of execution. As I wrote before, unlike others, they have not been involved in any scandals that would imply compromising quality to reduce operational costs, especially in terms of raw materials and production. Their work with leather is perfected—I checked this personally at a boutique recently. This applies not only to leather but also to RTW, which I paid special attention to. Moreover, as I mentioned earlier, their pieces are wearable and well-thought-out—there's no need to rack your brain on how to fit them into your wardrobe or what to wear under transparent trousers or tops as they already come with a lining included.
It helps shape responses to various questions in the context of PR—as mentioned earlier, recommending avoiding certain topics or keeping answers concise and controlled. When asked about the widely discussed fake Birkin bags selling for $70 at Walmart, Axel Dumas responded:
I have a corporate answer: We have no comment on this subject. Counterfeiting is something we take very seriously with its economic and social consequences.
And then, almost immediately, he added:
Difficult to know what exactly to think about it, apart from the fact that it irritated me and annoyed me sometimes [...] Making a copy like this is quite, you know, detestable.
From a PR perspective, the communications department's guidance was absolutely justified. If you cannot influence a situation—and in the case of intellectual property rights, this is often the case—the best thing to do is not to comment on it, avoiding giving it even more publicity. Even if there are legal mechanisms to act against unauthorized use of registered designs, it is crucial to weigh all the pros and cons before taking legal action (wrote here).
At the same time, Axel Dumas' unfiltered reaction is yet another stroke in the portrait of a company that appears truly genuine—or, more precisely, open.
Sometimes it's more difficult in success than in failure to remain faithful to oneself.
AFTERWORD
A long-term balanced strategy, allowing for flexibility in development, a grain of irony, an inward focus on quality, offerings, craftsmanship, and what can be improved rather than external distractions—is what makes Hermès group successful. Not despite, but because of.
I found it quite difficult to write this whole case study based on the FY 2024 results presentation because, aside from a few nuances, everything sounds almost too… dreamy? As Axel Dumas noted:
We sell desirability. Dream, that's the salt of our industry.
***
As I was preparing this REPORT, I refreshed my memory of the brand’s history and came across the story of how this wardrobe item made its way into the Hermès portfolio in 1949. In Cannes, a number of gentlemen—having been refused entry to the casino—visited the neighboring Hermès store in search of the requisite tie. This demand led the house to start producing ties.
These ties also reveal a hidden, playful, and creative side of their wearer. Each has a small secret—on the reverse side, there’s a unique illustration, varying by model, known only to the owner.
MAIN RESOURCES
Hermès 2024FY results: presentation, results note, webcast.
Hermès Universal Registration Document 2023 – A comprehensive overview of the group's financials, strategy, and performance. The one for 2024 should be out in a few weeks.
I offer tailored consultancy for luxury and fashion, focusing on key areas: e-commerce, PR & communications, pitching ideas for strategic growth. Explore the options here.
