The queen wore their scarves in her iconic 1950s stamps series. Grace Kelly used them as sling for her broken arm. For those paying attention, Sharon Stone had one on in her bondage scene in Basic Instinct. From Audrey Hepburn to Madonna, from Hillary Clinton to Sarah Jessica Parker, a sign of making it was surely when you flaunted the Herm?s scarf.
But the brand that is best known for its scarves and bags, actually has 14 product lines. None of which it started with, the product that established the brand, and fell victim to time and technology. Herm?s started in 1837 as harness and saddlery workshop in Paris. By 1867, it was the recognised maker for equine equipment as it won the First Class Medal at the Exposition Universelle, then the world?s largest and most prestigious fair.
The brand is celebrating its ?Year of India? in 2008, and perhaps not entirely without coincidence, opened its first outlet in India recently at Delhi?s Oberoi Hotel, home to many other global luxury brands as well. ?The objective is to become Indian in India. We are here to sell objects, not fashion,? insists Patrick Thomas, CEO, who is incidentally also the first head of the more than a century and a half old brand from outside the family.
A store in India may have just become possible, but India has been inspiring the luxury brand for decades. And finding a number of customers here too. Reportedly, there is already a wait list for the Birkin bag, which can set you back by a few lakh rupees ? globally the prices range from about Rs 3 to Rs 50 lakh! Not to mention the wait list, which depending on the leather, can be as long as six years!
Clearly this is not your common and garden variety of luxury brand. ?We are discrete. We do not want to show off. Our DNA is all about discrete elegance,? says Thomas. ?We have an internal motto,? he adds for good measure. ?We want to grow better, not bigger.? And that is reflected by the absence or low key presence of logo or brand name on the products. No wonder it has been the choice of those who prefer not to wear their luxury on their sleeves. And publicity is most often by word of mouth.
India beckons
?We are here for the long run,? stresses Thomas, ?it will take time for us to grow here.? To this end, the company will base a head of operations here. ?For us being in India is a two-way process. While we will sell here, we will also learn from here.? For now, the store, a comparatively small one when compared to the flagship Paris store, which is currently being expanded to 2,000 square metres, has a melange of representative items. While the silk scarves are priced at Rs 17,500, the ties are a modest Rs 8,800. The iconic Kelly bags are about Rs 3 lakh each. And there?s a whole lot more ? from apparel to crockery, watches to perfumes, each an objet d?art. While the collection for ready-to-wear will change twice annually, other collections like that in leather will be on sale for longer periods. India was also highlighted when lines by chief designer Jean Paul Gaultier, who did a Spring-Summer line in 2008, was inspired by the country?s royalty and colours, while supermodel Lakshmi Menon was their face in international campaigns for the period.
?The main focus is to make ourselves understood, says Neelam Khanna, the Indian partner. She too admits that the growth of the brand in India will be slow. She cites the high and uneven duty structure as a major challenge, saying it would create a 5-10% difference in prices compared to other markets. ?We are asking the government to lower tax rates,? she adds. And the company would rather be in its present location than a mall as ?this is more intimate,? explains Thomas.
Plans for India also include holding special exhibitions and shows for the target audience, in keeping with the global company practise. ?There are more than 250 ways to tie a scarf. We want to share that with our customers by explaining new styles to them,? says Thomas. And while there are no immediate plans to expand, Bangalore and Kolkata are the next destinations for Herm?s in India. Given that there are nearly 50 stores for the brand in Japan (14 in Tokyo alone), while China has 23 and South Korea 17, no wonder India is being eyed as a destination with a huge growth potential.
Global footprint
A family owned business for most of its existence, it went public in 1993. The family still owns about a third of the company though, and Thomas is the first head from outside the family. For him, global recession is not a huge factor for the brand. Revenue for 2007 stood at 1.62 billion Euros and currently, about 40% of the business is in Europe, the balance is divided almost equally between the US, Japan and the rest of Asia. ?The fastest growing markets are in China, Russia and the Middle East.? He claims the company will not lower prices despite the difficult financial situation globally.
Manufacturing for the company happens around the world. A lot is made in France, while watches come from, where else but Switzerland and ready to wear from Italy. India too is a manufacturing base for some bags, and Thomas is open to the idea of making more products here. ?We are going to inspire ourselves from Indian designs and are talking to companies already,? he reveals.
For those wishing to join the ranks of Grace Kelly and be the Indian muses for Herm?s, this may well be as good a chance as any as the brand tries to break into the admittedly difficult Indian luxury market, made no easier by the current financial downturn.
Hermes vs Hermes
* Arguably the most famous Hermes bag, the ?Kelly Bag? (left) was named after Grace Kelly, Princess of Monaco, as she was frequently spotted with it. The bag was initially called Sac ? d?p?ches when introduced in the 1935.
* The only competition it faces is from the Birkin bag, jointly made by actress Jane Birkin, who is said to have co-designed the bag with the then president Jean-Louis Dumas in 1984. Both bags have become cultural icons
* Each Herm?s bag is handcrafted, and Kelly bags are no exception. Each bag is made by a single craftsman and reportedly takes up to 18 hours to make. A Birkin usually takes longer. Leathers used for the bags are sourced from across the world. So there?s crocodile skin from Australia, alligator skin comes from Florida, buffalo from Pakistan, shark from Thailand, and oxen, deer, calf, goat, and ostrich from all over the world. There?s even lizard skin from Malaysia!
* And given that a new Kelly bag still has an average of one year wait period, while that for the Birkin can be even longer, there is a flourishing trade in used bags as well! But given that the value of a Herm?s bag generally appreciates over time, it might well be worth the investment to make amidst falling values for most traditional investments.
