WCME: Pony, Up
How Hermès rose to the top and why it matters.
What Caught My Eye is a new daily column about pushback.
Hello everyone, hope you had a great Easter weekend. I’ve been watching Succession. It’s one of those things where I joined the party late, but I am really enjoying the series. And the fashion! Which is a good mix of corporate chic Americana and Aristocratic casual—a very good combination. Both competing aesthetics take the edge off the other, making for a really complimentary ensemble. I really like Shiv’s style, which is a good sartorial dose of Loro Piana, Max Mara, and a couple good leather blazers.
A quick housekeeping note on Emma Horsedick (iykyk): over the weekend, this friendly little newsletter ran into some cyber trolling. I mostly laughed it off, but just to be clear—harassment, cyber violence, or any embarrassing trolling gets deleted without hesitation. I put a lot of work in creating this newsletter and keeping it safe takes precedence. I diligently research stories and write my own spins, I include my sources, I link products so you can shop, and manage the artistic direction.
So while I know that some Cyber Taekwondo is part of growing a modern online business, I’m also keeping a tight ship here.
That said, I welcome pushback, questions, and anything else you wanna throw on the runway. The key is keeping it cool and respectful.
Let’s get to it.
WCME: Hermès Rises To The Moment
On October 2010, when LVMH announced it had quietly bought a 14.2% stake of Hermès, the news led to the ultimate luxury face-off. Bernard Arnault, the luxury mogul who made a name for himself in the 90s by swallowing up family-owned companies under the LVMH umbrella was clearly thinking ahead.
The purchase had been done mostly through derivative assets and over the course of two years, wrote the NYT. But the surprise factor didn’t go well with the Hermès family. By the December of 2010, Hermès saddled up to fight back. The House refused to discuss any expansion of the relationship, calling on Mr. Arnault to withdraw his investment.
Hermès had been one of the few French luxury brands to weather the financial crisis of 2008 almost unscathed. The shocking acquisition led to a 4-year standoff, leading the Hermès family to bitterly accuse Mr. Arnault of fraud in an existential war that was splashed across the media.
By 2014, both Bernard Arnault and Axel Dumas, the Hermès CEO and inheritor, shook hands. Mr. Arnault was to hand off its entire stake to LVMH shareholders, raking in $5 billion in profit for investors, signing away his right to purchase Hermès shares for 5 years. And Hermès, well, didn’t get chopped up and sold off for pieces.
Still, it was a chaotic affair on the hamstrings of a post-crisis luxury decade. LVMH grew into a culturally savvy moodboard behemoth, and Hermès continued to grow little by little.
They retained their talent. They were careful with their product. They might’ve kept a secret stash of Birkin’s in the back room, and they scoffed at celebrity advertising. Why put a recognizable face upfront, to cast a shadow on a well-known product?
As trading closed last week on Tuesday, LVMH posted declining sales issuing a stock sell-off. LVMH shares sank 7.8%, prompting Hermès to claim the number 1 spot as world’s most valuable luxury company. In the last 5 years alone, Hermès shares have spiked over 200%, the NYT reported earlier this month.
Steady Wins The Race
So. What’s the secret sauce?
Call it a little avant-garde, but like, really dressed up. Call it doubling-down on it’s time, call it artsy, and homey. I’ve literally seen the in-house production casually team shooting campaigns on the street in Faubourg Saint-Honoré. They’ll sometimes curtain off a section of the jewelry department to shoot, letting the client’s minds run about the universe.
When the brand was left to the devices of it’s creative, it well, reigned in the horse, so to speak. Jean Paul Gaultier returned the house to it’s precise tailoring equestrian DNA in the aughts, creating a North Star for designers along the likes of Matthieu Blazy today at Chanel, who has embraced leather in garment construction.
Forget the institutional cotton blazer, and sharpen the look with it’s leather cousin. And leather pants!
The current head of the womenswear division, Nadège Vanhee-Cybulski, has been described to me by insiders as a smart creative, who will sometimes have a sip of Vodka as she’s doing fittings. She’s been at the helm for over a decade and has a resumé peppered with stints at Céline, Martin Maison Margiela, and most recently, The Row. Her menswear counterpart, Véronique Nichanian, has been in-house since 1988. That’s steady.
And it’s worked. Save for a client spat, the brand has maintained a tight ship with it’s image. Mess is simply not a good business strategy.
As the luxury industry is in upheaval, and clients are weary of the very rich, Hermès has remained a constant in luxury (and a good investment) with solid customer service and a consistent brand message.
This week, facing ‘America First’ branded tariffs, Hermès announced it was opening a leather workshop in Normandy and hiring 260 artisan staffers. The news comes on the heels of LVMH threatening to increase production to the United States at Europe's expense.
Why force a jewel brand to change homes to the US, wouldn’t it strip the branding? Why not create programs to build home-grown talent? Why reinvent the wheel, when it already works?
TTYT!
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Great article, and I 100% agree!