Pedestrians walk past an Hermes store, operated by Hermes International SCA, in Beijing, China, on Wednesday, March 13, 2013. Chinese Premier Li Keqiang pledged to open the economy to more market forces and strip power from the government to achieve 7.5 percent annual growth through 2020 and spread the benefits of the nation’s expansion.
Hermès is all about the long view. It takes a long time to train its craftsmen. It has a long waiting list for its Birkin handbags. And it took seven long years to open a new Hermès “Maison” in Shanghai – years in which the luxury market in China went from good, to great, to shaky.
By the time the Shanghai Maison finally opened last week, China’s luxury market was under full-blown attack by the pro-abstemiousness forces of President Xi Jinping. The Chinese leader has made it dangerous for government officials to be seen wearing, owning or even eating anything really expensive – from watches to cars to jewel-bedecked mooncakes.
This might seem like the worst possible moment to open a standalone historic mansion-cum-luxury shop on one of the most expensive retail streets in Shanghai. But Axel Dumas, Hermès’ chief executive since February, says time is actually on the company’s side in China.
Retail analysts agree: Chinese consumers are keener on niche top-end brands such as Hermès now than they were two or three years ago (and less and less keen on logo-laden, mass luxury rivals such as LVMH and Gucci).
Even the Communist party’s most determined austerity campaign has yet to put much of a damper on Hermès’ popularity. The company does not break out mainland sales, but Mr Dumas, sixth generation scion of the founding family, says “so far we haven’t seen any impact on our figures”.
Sales of watches, now almost a cliché in the world of “gifting” to government officials, did fall by 7 per cent in value terms in the first half, year on year, which Hermès attributes to Beijing’s influence. Overall, however, sales in Asia excluding Japan rose by 17 per cent. In comparison, LVMH’s first-half organic sales growth in Asia excluding Japan was only 3 per cent.
Whether it gives Mr Dumas any pleasure to note the vicissitudes of his close rival, which earlier this month abandoned its four-year battle to wrest control of Hermès’ from the family shareholders, cannot be known. No one is allowed to ask him at the Shanghai opening – a Hermès public relations officer had warned in advance that questions relating to LVMH would not be countenanced.
Still, the boyish Mr Dumas is happy to reflect on the ways in which his brand is different from the hoi polloi of other luxury marques in China. “Hermès has always been quite resilient in times of risk,” he says, pointing out that the 177-year-old company has faced headwinds before, and it will face them again, in China and elsewhere. “It’s important to take the long view,” he stresses.
Hermes: Fighting For Luxury
I bought my last serious boyfriend The Hermes Bull and Bear Tie=it is a great gift! 🙂