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Hermes: Luxury Giant, yet Still an Industry Outsider


(Image via BBC)

Hermes only moved into men's watches about seven years ago. Its new "Arceau L'Heure de la Lune" sells for £20,500-plus

 

First off, it's French. Second, it's a relative newcomer. Third, the bulk of its watches are aimed at women in a still male-dominated industry.

Hermes is at this week's Salon International de la Haute Horlogerie (SIHH) watch fair in Geneva, where the display cabinets are weighed down with chunky timepieces as complicated as a Ferrari car (but usually cost more).

"We are one of the challengers to an industry that is 300 years old," says Laurent Dordet, who heads the watch division, La Montre Hermes. He knows there's a lot of work to do "to become legitimate and accepted".

It helps being at this week's annual watch event, an invitation-only affair where Switzerland's most exclusive brands and artisan workshops unveil their latest products.

Paris-based Hermes is allowed in because it makes its watches in Switzerland. The listed, but still family-owned company, better known for its leather and silk products, got into ladies' watches about four decades ago, and men's in 2012.

But it is only in recent years that it became a more serious player, investing heavily to buy up Swiss component makers.


La Montre Hermes now produces all the dials, cases, and movements in-house - unlike some competitors. The division employs about 300 people, a fraction of the 13,000 employed in the core businesses.

Mr Dordet, a Hermes lifer, used to run the leather goods business, where his products were at the top of the luxury tree.

In the industry, Hermes' leather watch straps were as highly regarded as the watches. It makes straps for brands such as Parmigiani, and they are also available for the Apple Watch.

Now, since his appointment in 2015, he's running an operation where the brand must work harder to get noticed. "It's a challenge," Mr Dordet says.


 

He's been taking La Montre Hermes up the value chain. The business used to trade in the €2,000-€3,000 ($2,280-$3,420; £1,770-£2,660) bracket. Pricy to most people, but not in the world of fine watches.

But having a completely in-house operation means Hermes can design and produce far more complicated pieces, not just in the looks but the mechanics inside.

Hermes' standard watches now cost as much as €30,000, while special pieces with jewels are €100,000-plus.

Ariel Adams, founder of the closely-read website ablogtowatch.com, says female fashion house watches - where the product is just one of many luxury items - have traditionally not been taken as seriously as those produced by firms that only make timepieces.

"There has been an unfortunate bias by collectors against watch brands that appear to primarily produce products for women," he says.

"I've personally never quite understood this. Perhaps it is the large assortment of comparatively inexpensive women's fashion watches that have prevented more high-end customers from taking the watches more seriously." More at BBC.com

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