Thursday, September 11, 2014

Jane Birkin is auctioning off one of her namesake Hermes bags on eBay

Jane Birkin is auctioning off one of her namesake Hermes bags.
The Brit actress has decided to put the sought-after accessory on the web marketplace to raise money for Anno's Africa which seeks to offer an arts education to orphans in the continent's most deprived cities.
The Parisian luxury label created the bag in 1981 when their late chief executive Jean-Louis Dumas sat next to Jane on a flight from Paris to London and - after noticing her flimsy straw carry-on - created a leather weekend bag for the stunning brunette to travel with.
Her daughter, Charlotte Gainsbourg, will also auction off her own signed edition of the Balenciaga City Bag for the charity which was set up in honour of Jane's nephew, the poet Anno Birkin, who perished in a car crash shortly before his 21st birthday.
The 67 year old fashion icon told The Telegraph newspaper: ''My handbag is being auctioned off to help a charity called Anno's Africa. That this epitome of 'chic Parisienne' should end up being useful in the Kenya slums...
''I'm very proud...By it's sale, to be able to bring art and dance, music and circus and a bit of fun and self worth to children who have nothing... to bring lightness and a future to hundreds of children in these slums, to permit artists to go there and work with these children... What better end for this Birkin bag than to help this cause, Anno's Africa in memory of that poet's name.''
The starting price for the handbag - which retails in store from around £4,800 up to £100,000 - has been set at £10,000, although it is expected to fetch well over £30,000.

Here's a link to the eBay listing:
JANE-BIRKIN'S Signed/Owned Black Leather Hermes Birkin-Bag

Wednesday, September 10, 2014

Hermes Goes Underground....Opens in Grand Central Station NYC about taking a brand to the masses. i guess Hermes figures if you can afford a subway token then you can afford a $45,000 handbag or $470 cotton boxer shorts.

Saturday, September 6, 2014

World's most exclusive handbag up for auction

Crocodile skin tote encrusted with 245 diamonds has price tag of £125,000

  • Bag is described as 'the rarest and most desirable handbag in the world'
  • Made from crocodile skin with white gold clasps and studded with diamonds
  • Goes under the hammer in Beverly Hills this month
  • May break record £125,000 paid for a red Birkin bag in 2011
  • Jane Birkin, after which the bags are named, says they're 'bloody heavy' 
  • Sharp elbows may be required when this handbag goes under the hammer - because it's the most desirable one in the world.
  • Kim Kardashian, Jennifer Lopez and Victoria Beckham are all proud owners of iconic Hermès 'Birkin' bags, and the emergence of this unique version is sure to create a bidding war.
    The plush accessory is made from crocodile skin with white gold clasps and studded with diamonds, and experts say it could smash the £125,000 world record for a handbag paid in 2011.
    The bag, which only measures 30cm across, is set to be a record breaker, expected to reach over £125,000
    The bag, which only measures 30cm across, is set to be a record breaker, expected to reach over £125,000

    But ironically the only person who won't be interested in buying it is Jane Birkin herself - because she doesn't like them.
    The British actress after which the much sought-after foot-long bags are named famously denounced them as 'bloody heavy' - and said the one she owns hurts her arm.
    This bag - a 30cm Diamond, Matte Himalayan Nilo Crocodile Birkin Bag - is encrusted with a whopping 245 diamonds and all the fittings are in 18-carat white gold.
    Experts say the bag, which is in pristine condition, is the most spectacular one ever made by the Parisian fashion house.
    Victoria Beckham is famously fond of the Hermes design, reportedly owning a collection worth over £1.2 million, while Kim Kardashian has so many that she uses one as a gym bag.
    It is estimated to fetch $200,000 - around £125,000 - when it goes under the hammer at Heritage Auctions.
    In 2011 Heritage sold a red Hermes Birkin for just under £125,000, setting a world record at the time.
    Kathleen Guzman, managing director at Heritage Auctions, which is selling the bag, said: 'A 30cm Diamond Himalayan Birkin is possibly the rarest and most desirable handbag in the world.
    'This bag is so rare and sought-after that there's a very good chance it could meet or exceed the world record price we saw three years ago.
    'This is the only time that a bag of this calibre has appeared on the luxury re-sale market. This is a dream piece for the collection of true Hermes aficionados.'
    The auction will take place on September 23 in Beverly Hills, California. 


Thursday, September 4, 2014

LVMH and Hermes call truce in 'handbag war'

PARIS (Reuters) - A long and bitter battle that has gripped the luxury goods industry and pitted two of France's richest families against each other came to an unexpected end on Wednesday when LVMH and Hermes agreed to a truce.
Under the deal, LVMH - the world's No.1 luxury group, controlled by France's wealthiest man Bernard Arnault - agreed to relinquish most of its 23.2 percent stake in Hermes and not acquire any shares in its smaller rival for five years.
It effectively buried the possibility LVMH could make a full takeover bid for the 177-year-old maker of Birkin and Kelly handbags. Such a prospect had boosted Hermes's stock, which has been trading at a price-to-earnings ratios of about 30 times in recent years, a 70 percent premium to the industry average.
Shares in Hermes fell nearly 10 percent to 236.5 euros in early trading on Wednesday, wiping out 2.8 billion euros ($3.7 billion) off its market value - equivalent to around 350,000 Birkin handbags based on an average price of 8,000 euros. By market close, they were down 3.5 percent.
"The speculative premium has disappeared," said Barclays France director Franklin Pichard.
The deal, under which LVMH agreed to redistribute its stake in Hermes to its shareholders, ends four years of legal warfare between the luxury titans, dubbed the "handbag war" by the press.
In 2010 LVMH - whose brands include fashion labels Christian Dior and Louis Vuitton, Hennessy cognac and Dom Perignon champagne - revealed it had built up a 17 percent stake in Hermes. It made the investment through a series of equity derivatives instead of straightforward share purchases, which prevented it from having to declaring them.
Hermes, one of France's last major independent luxury group still controlled by the founding family, vehemently protested at having its arch-rival as its biggest external shareholder.
According to French magazine Challenge, the Hermes family is Frances's fourth richest with a fortune estimated at nearly 19 billion euros, behind LVMH's Arnaults - estimated at 27 billion euros, L'Oreal's Bettencourts and Auchan's Mulliez. They come just ahead of Chanel's Wertheimer brothers.
Arnault had long set his sights on Hermes as it is considered one of the luxury brands that best resists downturns, with its products increasingly regarded as investments and benefiting from a thriving second-hand market.
While the sales growth of rival mega-brands such as Gucci and Louis Vuitton have ground to a halt in the past year, Hermes has continued to enjoy an annual revenue rise of more than 10 percent, consistently higher than the industry average.
The deal marks the first time Arnault - whose LVMH group has gobbled up more than 60 brands in the past two decades, including sizeable ones such as Roman jeweler Bulgari - abandons the pursuit of a prized target.
But the truce nevertheless offers a profitable solution for LVMH, which began building up its stake in Hermes in 2007 and 2008. It stands to make a theoretical gain on its holding of around 3 billion euros, analysts estimated.
"This clears up the situation and it is one of the few divorces in which both the partners are winners," said Mario Ortelli, luxury goods analyst at Bernstein.
Groupe Arnault, the family holding company of LVMH, will own 8.5 percent of Hermes after the share distribution.
Arnault is a proven master at exploiting family tensions when trying to buy a company. When the dispute started in 2010, industry observers thought the billionaire would seek to apply the same technique to Hermes' more than 100 family shareholders, divided between the Puech, Dumas and Guerrands.
A year later, most key family members except Nicolas Puech, who owned just under 6 percent of Hermes' shareholder capital, agreed to join a holding that controlled the company and bound them for two decades, making a takeover virtually impossible.
"LVMH has found an elegant way out of what was a deadlock," JP Morgan Cazenove said of the peace deal.
LVMH shares, flat since Jan. 1, rose about 3 percent on Wednesday. LVMH stock has underperformed the luxury goods industry in the past year over concerns about declining cognac sales in China and slower sales growth at its main profit generator Louis Vuitton.
The French stock market regulator fined LVMH last year for failing to properly disclose the stakebuilding and Hermes launched legal action against LVMH on allegations of insider trading and stock price manipulation.
LVMH fought back with proceedings against Hermes for libel.
The agreement signed on Tuesday night ended all legal proceedings between the two companies, they said in a joint statement issued on Wednesday.
For 21 LVMH shares, shareholders will receive 1 Hermes share, sources close to LVMH said. The distribution of Hermes shares will be completed no later than Dec. 20.

Handbag Dispute Leads To State Court Suit

The Hermes Birkin, a popular handbag among celebrities and Hampton socialites alike, is only occasionally offered by Hermes, and can retail for anywhere from nearly $10,000 to as high as $150,000—essentially an unattainable purchase for the common man, and thus a symbol of luxury and status for those that can afford it. The Kardashian sisters, famous for their curves and airing their dirty laundry via reality television show on the E! Network, are no exception to the celebrity Birkin bag following.

The Birkin bag made metropolitan area headlines earlier this month in a different context: Dr. Tara Allmen, a Manhattan-basted doctor, is suing Tisha Collette, founder of Collette Consignment, a local vintage store with shops in Sag Harbor, Southampton and Manhattan, accusing her of selling a fake Birkin handbag.

This month, the case, which was filed as a civil suit in January 2013, is now at the State Supreme Court, because the plaintiff is seeking punitive damages upward of $50,000, according to Dr. Allmen’s lawyer, Joseph Vitulli, himself a part-time Quogue resident.

Dr. Allmen said his client claims that eight years ago, in 2005, Ms. Collette sold her a fake Hermes Jean Paul Gaultier Birkin handbag, with a price tag of $3,500 in the shop. According to the plaintiff’s attorney, Ms. Collette claimed that the Hermes Birkin was authentic at the time of the sale.

Ms. Collette maintains, however, that she never even sold the bag in question to Dr. Allmen.

In a phone interview earlier this month, Dr. Allmen explained that she pressed charges only recently because she was unaware that the bag was a fake until a cleaning company would not clean the bag because it was not a bona fide Hermes Birkin. Dr. Allmen maintains that it was Ms. Collette who sold her the fake, and that the bag had been owned by Ms. Collette herself before she sold it to Dr. Allmen.

However, Ms. Collette adamantly says that Dr. Allmen was wrong about the entire situation.

“I don’t own a Birkin and have never owned one,” she said in a phone interview. “I am in the business of selling them.”

Ms. Collette insisted that Dr. Allmen never purchased the orange bag in question from one of Ms. Collette’s consignment stores. “Tara Allmen never bought that bag from me and has no proof that she bought that bag from me ... nor has she even come into the store with the bag to inspect,” the store owner said.

The he said-she said continues: Mr. Vitulli stated that he and his client, Dr. Allmen, had previously “tried to resolve this with the retailer, but they were being very foolish,” he said, referring to Tisha Collette. He added, “She’s doing bad things.”

The two parties do seem to agree upon this: Ms. Collette said that she did offer to have Dr. Allmen come into the store so that the store owner could inspect the bag and work out a resolution. “She used to be a very good customer of mine,” Ms. Collette said of Dr. Allmen.

Ms. Collette insisted that she wanted to help Dr. Allmen in any way that she could. However, it did not pan out that way: Instead of seeing Dr. Allmen with the bag in question, Ms. Collette was served with court papers and a lawsuit.

In the interim, several others have come to Dr. Allmen’s defense—or, rather, lined up to criticize Ms. Collette—although she is the only one to actually take her complaint to court. Tracy Tooker, owner of an eponymous hat shop on Hill Street, claims she is owed more than $1,000 after Ms. Collette sold four of her hats and turned over only $150 to Ms. Tooker. A friend of Ms. Tooker’s, Victoria Henderson, was similarly critical of Ms. Collette, though she offered no specific examples to support her remarks.

Ms. Collette said that after the stock market crashed, copies of designer items—not just Birkins, but other high-end accessories—began popping up everywhere. Essentially, people didn’t want their Kardashian-like lifestyles and seemingly wealthy reputations to suffer, even if their pocketbooks were literally in the dump. So they turned to the symbols of prosperity—fake Birkin bags and all.

“Clothes and shoes were even turning up as copies, but bags are the number-one copy,” said Ms. Collette.

Her point? Dr. Allmen may have received the Birkin as a gift or perhaps purchased it somewhere else, the store owner says, but she did not purchase a fake bag from Collette Consignment.

Ms. Collette said Dr. Allmen should have been tipped off about the bag, wherever she bought it, when she paid only $3,500. Even in 2005, for a previously owned, authentic Hermes Birkin, the price tag should have been much more than $3,500, according to Ms. Collette. “I have six in my store right now, and the cheapest is $16,000,” she said.

Ms. Collette expressed sympathy for Dr. Allmen, saying, “She used to be a very good customer of mine.” Dr. Allmen had bought handbags, clothes and more from Ms. Collette in the past, the latter said.

The store owner said Dr. Allmen has failed to produce the actual bag or produce a receipt for the purchase of an Hermes Birkin. She acknowledged that Dr. Allmen did have a receipt for purchasing an orange bag from her, but said it does not specify that it was an Hermes Birkin that was sold. However, in an email this week, Dr. Allmen stated she does have a receipt from Collette Consignment that specifically states the purchase of an Orange Birkin with the store owner’s initials, next to the description. Dr. Allmen failed to produce the receipt, however, at the discretion of her lawyer. “My lawyer forbids photographing it, as it is a critical part of my case showing that Tisha herself committed the fraud,” she said.

Still, the store owner shows concern for her former customer, Dr. Allmen. “I feel terrible that she has been duped somehow, somewhere ... I’m not sure ... it’s a little bit weird,” Ms. Collette said. She also called it “all a little strange that it’s happening all these years later.”

The Birkin made a name for itself long before the Kardashian sisters could even spell Hermes. At the height of its popularity, circa 2004, “Sex in the City” devoted an entire episode to the cultural phenomenon that was, and still is, the Hermes Birkin. A salesman put it perfectly when he once told Samantha “It’s not a bag ... it’s a Birkin.” And at that, Samantha had to have it. The problem? The waiting list was longer than the larger-than-life price tag itself.

Samantha learned what every other woman in New York knows: A Birkin sets you apart from other people, because a Birkin is not just any bag. Materialistic socialites, Samantha included, know that a Birkin is not just an expensive accessory, but a status symbol as well.

Who wouldn’t want a Birkin? They are more than bags—they are statements of material wealth. In 2011, it was reported by InStyle that Kourtney, Kim and Khloe together owned 13 Birkins; and the numbers only went up from there. Kim Kardashian, arguably the most famous of the Kardashian trio, received a larger-than-life, custom-painted Hermes Birkin courtesy of her then-fiancé Kanye West this past Christmas.

Ms. Collette has owned Collette Consignment for 14 years, and she maintains that you don’t get the reputation she has by selling fake purses and tricking customers into thinking they are authentic. “Every single one of the bags in every single one of my stores are authenticated,” she assured. “I can spot a fake really easily. If any one of them needs authentication, we outsource to an authenticator ... especially for high-end items.”

There are a few key things to look for when purchasing an Hermes Birkin, Ms. Collette said. Most important, underneath the strap there is a stamp that says “Hermes.” The inside of the zipper also contains the same label. Each and every authentic Birkin bag on the market is handmade. When buying anything designer, craftsmanship and quality are two qualities to look for in differentiating genuine from counterfeit items, and an Hermes Birkin is no exception, Ms. Collette said. Before she finalizes any deal regarding an Hermes Birkin, Ms. Collette said, she looks for these marks of authenticity.

Regarding the pending lawsuit, Ms. Collette said that she and her attorney have filed a motion to dismiss Ms. Allmen’s complaint and are waiting to hear back. “I’m just letting the lawyers handle it at this point. I have nothing negative to say about her at all ... just letting the courts handle it,” she said.

Dr. Allmen, on the other hand, said she was “appalled to have Tisha Collette be so despicable in her business dealings. One must do the right thing and make Tisha Collette responsible,” she said.

“I’m not in any way concerned. The judge already threw the case out once,” Ms. Collette maintained. The store owner had a piece of advice for fellow consignment shop owners: “Be careful. What’s to protect the consignment store owners?” she said.

Wednesday, August 20, 2014

Inside Hermès: Luxury's Secret Empire

Axel Dumas, sixth-generation scion of the Hermès luxury goods dynasty and since February its CEO, has a secret. Sitting in his tenth-floor office with a glittering view of Montmartre, for an appointment that’s taken weeks of negotiations, Dumas is four days away from replacing Christophe Lemaire, the highly regarded designer of Hermès’ important ready-to-wear women’s fashion line.
So what does the 44-year-old chief executive want to talk about? “The main strength of Hermès is the love of craftsmanship” is the first thing he says in his accented but fluent English. Ten seconds later: “We see ourselves as creative craftsmen.” Thirty minutes in: “The philosophy of Hermès is to keep craftsmanship alive.” After two hours Dumas is still holding back on the granular details, no matter which way I ask, of how Hermès has emerged as the most ascendant company in the $300 billion luxury market. No guidance on the art of selling everything from $94,000 crocodile leather T-shirts to $1,275 beach towels. And certainly nary a hint that Dumas would imminently replace Lemaire with Nadège Vanhee-Cybulski, the 36-year-old design director at The Row (the couture clothing brand run by the Olsen twins), even though he knew that I would soon find out along with the rest of the world.
But all this obfuscation and secrecy, perversely, also drives home what has prompted Hermès’ stock to shoot up 175% over the past five years. Indeed, on FORBES’ accompanying list of the world’s most innovative public companies, the 177-year-old Hermès is ranked No. 13, ahead of companies such as Netflix NFLX +0.83%, Priceline and Starbucks SBUX -0.1%. The list, determined by measuring which companies trade at a level incongruous to their underlying financials and assets, measures each company’s market-tested premium for innovation. Dumas’ high-flying stock, accelerated by LVMH’s apparent interest in a takeover several years ago and a thin float, doesn’t rely on the technological efficiencies that drive so many others on this ranking. Nor is it propelled solely by his endlessly repeated “craftsmanship,” though that’s certainly an essential underpinning.
At Hermès any lasting premium derives from mystique. After all, selling a commodity ultimately boils down to one thing: price. But selling beautiful objects that people don’t inherently need? That requires a more complicated formula that Hermès has mastered: Last year the company set a record, reporting an operating profit of $1.69 billion with $5 billion in sales–the fastest-growing company in its industry over the past six years, fueled by a sort of branding and marketing craftsmanship as exacting as the stitching on one of its iconic Birkin bags.
The payoff for this softer kind of innovation is enough to make a social media startup founder blush. In examining Hermès’ ownership structure, FORBES estimates that at least five family members now belong on our global billionaires list. And the collective fortune for Dumas’ family now tops $25 billion–more than the Rockefellers, the Mellons and the Fords. Combined.
The creation of one of the world’s great wealth machines, built within the kind of sprawling family structure that tends to stifle innovation rather than spawn it, boils down to three dates.
The first one traces back to 1837, when a leather-harness maker named Thierry Hermès established a shop in Paris. To the beau monde who relied on equipage for travel, the quality and beauty of Hermès bridles and harnesses were unrivaled. Thierry had only one child, Charles-Emile, who moved the business to 24 Rue du Faubourg Saint-Honoré, where it remains to this day. Charles-Emile, in turn, had two sons, Adolphe and Emile-Maurice, who transformed the business into Hermès Frères. But eventually Adolphe believed the company had a limited future in the era of the horseless carriage, leaving Emile to carry on. Emile had four daughters (one of whom died in 1920), which explains why no one involved in the family business is named Hermès. It’s those descendants–the fifth and sixth generations–who control the company today.
The second turning point for Hermès came far more recently, in 1989. Over the course of the 20th century Hermès remained one of the world’s great luxury brands. But with its focus on artisans–every one of its leather goods is made by hand in 12 workshops in France by more than 3,000 skilled workers –it was built to trot, not gallop. Under Axel Dumas’ uncle, Jean-Louis Dumas, CEO from 1978 to 2006, much of the family ownership had split into a Russian-nesting-doll-like group of six holding companies. Layered atop that was an ingenious two-tier management structure engineered by Jean-Louis. One was more about ownership–a family-only entity named Emile Hermès SARL, after their ancestor–that sets budgets, approves loans and exercises veto power. The other, Hermès International, oversees the day-to-day management of the company and incorporates outsiders (nonfamily members currently occupy 4 of 11 board spots).
As with everything Hermès, it was byzantine and painstakingly mapped out. It worked. The new structure helped Hermès in 1993 sell 4% of its shares to the public, giving younger generations a way to liquidate while allowing the family to keep control. And that new war chest helped encourage Hermès to think bigger than a fine leather goods maker. Jean-Louis Dumas expanded the company into men’s ready-to-wear attire, tableware and furniture. Between 1989 and 2006 sales grew fourfold, to $1.9 billion. Still, it wasn’t a foolproof plan. Bernard Arnault, head of the world’s largest luxury company, LVMH (Moët Hennessy Louis Vuitton ), took note of the growth. Hermès fit right into his burgeoning portfolio in the same way Dior and Fendi did. So in 2002 Arnault began accumulating shares, using the same cash-settled equity-swaps strategy that hedge funds use to amass positions without technically needing to disclose. In 2010 Arnault publicly revealed that he controlled 17% of Hermès and a takeover seemed a fait accompli. With the stock up 30% on such speculation, the three branches of the remaining Hermès family were expected to take the money and run.
Arnault’s move, instead, created the company’s final turning point. Rather than cash out, the family circled its leather-upholstered wagons. Patrick Thomas, the non-family-member who served as CEO between Jean-Louis Dumas and Axel Dumas, famously declared that “if you want to seduce a beautiful woman, you don’t start raping her from behind.”
In another bold move, in 2011 more than 50 descendants of Thierry Hermès pooled their shares into what was essentially a $16 billion co-op called H51. The contributors–representing 50.2% of all company shares–contractually agreed not to sell any shares for the next two decades. Two other major shareholders, fifth-generation family members Bertrand Puech, now 78, and Nicolas Puech, 71, kept their shares outside H51 but also held the line against LVMH, agreeing to give other family members the right of first refusal if they ever decided to sell.
Staring at a chart of the family’s baroque ownership structure can cause dizziness. LVMH and Hermès continue to fight it out in court, with Hermès even pursuing criminal charges for insider trading; LVMH has countersued, claiming false accusation. (“The battle of my generation,” says Axel Dumas. “Hermès is not for sale, and we are going to fight to stay independent.”) However, it turns out the family’s unified front has proved profitable for Hermès. For the company the two-decade time frame once again allows it to make long-term decisions as if it were a private company. And for the family, it was a burn-the-ships decision. The lockup means that most family members must make do with dividends, although for people like Nicolas Puech, whose $2.1 billion holding generates an annual dividend of around $20 million, it’s enough to keep him in horses at his Spanish estate. Thierry Hermès would surely have approved.
Boutique mystique: In 2010 Hermès  opened a Rive Gauche store in Paris designed by RDAI. (Credit: David Yellen For Forbes)
Mystique is hard enough to achieve, let alone maintain over two centuries, but here’s one example of how Hermès carefully cultivates its image: In May of this year the world’s most elegant carnival was staged inside an august space on Wall Street: financier J.P. Morgan’s legendary corner bunker at 23 Wall. A photo booth was set up to capture celebrity guests atop carousel horses, a faux synchronized swimming dance number was performed, and a fortune-teller predicted the future based on a selection of silk scarves.
This is how Hermès celebrated its first women’s runway show in the United States. Much as one might want to congratulate the marketing department for the sensory overload spectacle–down to taste (champagne was served from a “bangle bar” shaped like an enamel Hermès bracelet) and smell (white-gowned ingenues proffered flowers scented with the brand’s latest fragrance, cooing, “Would you like to smell Jour d’Hermès Absolu?”)–that would be impossible: Hermès doesn’t have a marketing department.

Why should it? McKinsey doesn’t have a consulting department nor does Microsoft have a software department. Marketing is Hermès’ core business.
At the carnival, standing atop the red carpet and greeting the 800 VIPs, including Anna Wintour, Jodie Foster and Martha Stewart, as they entered, was Hermès’ de facto head of marketing: Axel Dumas.
“Our business is about creating desire,” he says. “It can be fickle because desire is fickle, but we try to have creativity to suspend the momentum.”
To instill this ethos in the company, all new employees are steeped in Hermès’ desire-creating culture through three-day sessions called “Inside the Orange Box” (so named for the signature packaging) that trace the company back to Thierry Hermès and give a history of each of the product categories (or “métiers,” in Hermès-speak, which is French for a trade). Thus every Hermès employee can wax philosophical about the Kelly bag, the trapezoidal saddle bag from the 1890s that Axel Dumas’ grandfather transformed into a women’s handbag and that Grace Kelly made iconic.
But the main guardian of the Hermès mystique is the family itself.
According to a former top Hermès executive, a luxury consultant with close ties to Hermès, as well as one of the company’s Asian executives (both of whom insisted on anonymity), nonfamily executives rarely make strategy or branding decisions without the input of at least one Hermès descendant, many of whom may wear several hats at the company and thus hold sway over multiple mètiers.
“If there are three or five people around the table and the family member says ‘yes,’ who will say ‘no’ ” says the consultant. “ Nobody is powerful enough to counter that.”
Once product and marketing sensibilities are vetted, however, a top-heavy roster of lieutenants is given a large degree of autonomy to execute. Creative director Pierre-Alexis Dumas (Axel Dumas’ first cousin) sets the tone, but the company perfumer (or “nose”), Jean-Claude Ellena, runs a laboratory inside his home outside the city of Grasse and develops Hermès’ fragrances. Another cousin, Pascale Mussard, heads Petith, a division that makes one-of-a-kind objets from Hermès remnants, scraps of crocodile skin or swaths of unused silk. And the events teams, once given their marching orders, let their whimsy show, as evidenced at J.P. Morgan’s old office. “We’ve always said we don’t take ourselves too seriously at Hermès,” says the company’s U.S. CEO, Robert Chavez.
Objects of desire: The artisans of Hermès create everything from basketballs and custom car interiors to Birkin bags and bicycles.
The autonomy is even greater at the retail level. Twice a year more than 1,000 store representatives come to Paris for an event called “Podium,” where they select which pieces of merchandise they will carry. The family has decreed that each flagship store must pick at least one item from each of the 11 métiers–thus pushing them beyond handbags, scarves and ties to perfume, jewelry, watches, home accessories. In giving these managers an elaborate menu to choose from, each store boasts merchandise unique to itself. The moneyed globe-trotters who constitute the Hermès customer base constantly find themselves on a worldwide treasure hunt. For example, only in Beverly Hills can they find a $12,900 basketball, and the $112,000 orange leather bookcase was sold exclusively at the Costa Mesa store. So when they fall in love with that $11,300 bicycle there’s a pressure to get it, since the company’s website, while ahead of many luxury competitors, offers just a smattering of the Hermès product line.
The top case study at the “Inside the Orange Box” indoctrination, according to those who have attended, surrounds the Hermès Birkin bag. And rightly so. The Birkin, a chic cousin to the Kelly bag that runs from $8,300 to $150,000, embodies everything that keeps the Hermès brand so profitable.
It also represents the highest order of Dumas’ fabled craftsmanship. When I visit the six-story workshop in the Parisian suburb of Pantin, I watched French leather workers who must have at least three years of training before ascending to Birkin duty, hand-stitch each crocodile and goatskin leather seam with two needles and beeswax-covered thread, and hammer the tiny rivets that attach the clasps to the leather. Vertically integrated leather, no less: In another example that defines a different kind of innovation, Hermès purchased two crocodile farms in Australia in 2010 and an alligator farm in Louisiana to supply the finest skins.
But since taste, as noted, is fickle, the ability to keep the Birkin as apparel’s ultimate status symbol proves to be a cold, hard business. The genesis story helps: As with the Kelly bag, it began with a fashion symbol. In 1981 Jane Birkin, a British actress and “It Girl” from London’s Swinging ’60s, was sitting next to Jean-Louis Dumas on a flight between Paris and London when he noticed her overstuffed straw bag. “You should have one with pockets,” he told her. “The day Hermès makes one with pockets, I will have that.” “But I am Hermès,” he told her and soon ordered up a variation on the Kelly with a similar belt and lock closure. The Birkin debuted three years later and became an instant hit.
While Hermès officially denies that bold-faced names get special treatment in procuring one (“We consider all of our clients to be celebrities in their own right,” says Chavez), the Birkin bag somehow, over the decades, finds its way onto the arms of the most current set of tastemakers. Beyoncé, Lady Gaga and Kim Kardashian all sport one. And Victoria Beckham is said to have a collection of Birkins worth more than $2 million. At LVMH the paid celebrity endorsement is an art, from Michelle Williams representing Louis Vuitton bags to Charlize Theron as the face of Dior perfume; at Hermès the perception (and reality) that the A-list is truly its customer proves to be a less expensive, more authentic endorsement.
The velvet rope beckons the rest of us. You won’t find a Birkin or Kelly bag online or even in a store. And Hermès says it has done away with its reputed waiting list. “They would probably be seven to ten years,” says Chavez. “If you want a bag in lizard or crocodile it could take longer.”
Like the most exclusive clubs, membership qualifications are intentionally vague. “There is no specific rule about it,” says Dumas. Echoes Chavez: “There’s really no system.”

Indeed, when I went to the New York City flagship on Madison Avenue to ask about buying a Birkin, I was told there were none in the store.
“When will you get one in?” I asked innocently.
“I couldn’t say.”
“Could you take my information and let me know when one comes in?”
“We don’t do that here.”
“I’ve heard there is a waiting list.”
“We don’t do that here.”
“When was the last time you had a Birkin for sale in the store?”
“I couldn’t say.”
“I’ve heard that if I’m a good customer and spend a lot of money, I have a better chance of getting a Birkin.”
“We don’t do that here.”
Short of mega-influence, the only sure way to get one of the coveted bags is to buy it on the auction market. The appreciation of Hermès bags can be staggering, particularly for the more exotic skins. In 2013 Heritage Auctions sold a collection of Birkins for three to five times the presale estimates. The record for a Birkin was the $203,150 that a collector paid in 2011 for a red crocodile bag with white-gold-and-diamond detailing. That’s mystique at its poshest level.
Interior by Hermes (Credit: Alexis Goure)
Axel Dumas even orders lunch in a Hermès-kind of way. “I’ll have your best steak,” he says, paying little mind to the menu, while dining at New York’s Capital Grille.
He’s talking about what’s next for the company. Hermès, which currently has 318 stores on five continents, is opening a new flagship in Shanghai this month (it already has three other maisons in that city). And while Dumas is renovating stores in Indonesia, Taiwan and London, next year will carry an American focus, with seven expansions and openings, including a Manhattan perfume store near the World Trade Center and a new location in Miami.
Though Dumas is typically circumspect about many other initiatives, he’s willing to guarantee one thing: that Hermès, for all its legal battles, will not wind up succumbing to LVMH. “The mood of the family has always been very strong and very determined,” he says. “We are here for the long term.”
Could he imagine his son or daughter following in his footsteps at the company? He says that he won’t try to persuade them. But he also makes it clear that some member of the seventh generation would be expected to step up and continue the tradition of product excellence and sales sorcery. “I am just the tenant for the next generation.”
Forbes Staff
Additional reporting by Hannah Elliott and Arooba Khan.

Sunday, August 10, 2014

Hermes Ready to Wear Circa 1952

LIFE magazine 1952
photos ©Gordon Parks


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