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Hermes's hot couture
THE job of interviewing the head of a luxury house is always a little harrowing, not least because one's choice of attire comes under the scrutiny of someone who deals with status bags and couture detailing on a daily basis.
When it comes to meeting with the CEO of arguably the world's most exclusive brand, the usually frivolous dilemma of what to wear becomes one of surmountable magnitude. And as expected, Axel Dumas, sixth generation scion and chief executive officer of Hermes, zoned in immediately on this reporter's choice of handbag. After all, the name "Hermes" is a byword for the ultimate statement purses, as well as a pantheon for all things luxurious.
Selling bags, and every other collectible under the sun ranging from pencils sheathed in madras goatskin to fine bone china, however, takes a lot more than the ability to spot a de rigueur accessory. In town to unveil the revamped four-storey flagship boutique at Liat Towers, Mr Dumas also isn't just another company chief. He is custodian of a 179-year-old business that has fought palladium touret and clou (hardware that can be found on a Birkin bag) to be kept in the family.
"In some ways, it's touching to be in Singapore to open a store like that," says Mr Dumas, who arrives at the VIP lounge of the boutique clad in a double-breasted navy blue suit.
"When I saw the building, I thought about my grandfather who opened Singapore in the '70s, I thought of my uncle, (the late president of Hermes, largely credited for reviving the fashion house) Jean-Louis Dumas, who looked at Orchard Road 30 years ago, and now we're opening this building and six generations after, it's still interesting to see that this part of the world is still growing and important for Hermes."
Every other luxury house banks on a story steeped in legacy and heritage. But few actually boast of being run by its founding family instead of a massive conglomerate that monopolises the entire industry of high-end products. But the multi-generational empire founded by Mr Dumas's great-great-great-grandfather, a leather-harness maker named Thierry Hermes, was almost not to be.
Even before taking over the reins of the Paris-listed company in 2013, Mr Dumas was up in arms for years in what he called "the battle of our generation", as luxury conglomerate Louis Vuitton Moet Hennessy (LVMH) was accumulating shares of the company from as early as 2002 without the knowledge of Hermes. Following years of legal battles and strategic pooling of shares by the 100-odd descendants of Hermes to prevent a takeover, Hermes reached a settlement in 2014 when LVMH agreed to relinquish its 23 per cent interest in Hermes, worth some 6.4 billion euros (S$9.6 billion).
"There have been challenging times, of course, over the years," says Mr Dumas. "Each generation has to take care of the issues which they wished they did not have to deal with. So I took it with determination, but humility, to deal with the issues that I had, and we are very determined as a family to keep a company that the seventh and eighth generations are going to be proud of." As a family-run company, Hermes is in a position to pursue a stance of autonomy and independence through the ranks of its business, something unheard of in an industry where every make of mannequin in a display window or mix of merchandise in each store is dictated by headquarters.
"I would say there is freedom of speech and discussion, and that has created an environment which is very creative and open-minded," says Mr Dumas.
"We don't have a marketing department like other companies, and our creators are very free to create what they believe in and I think that has created a unique environment for creativity.
"There is also the freedom of buying for each store. Twice a year, we hold a big gathering in Paris which is like a huge street market. Everyone, 800 people from over 50 different countries, discuss what they are buying, which means that every Hermes store is unique.
From saddlery to luxury
"There isn't a general policy on visual merchandising from Paris. Whether in Singapore or anywhere else, there are different window designs showing different things, and I think it has created a very unique perception of every store, and it gives a lot of personality."
A business that has parlayed its roots as a saddlery founded in 1837 into the epitome of luxury fashion certainly requires a degree of unyielding creativity to evolve and adapt to consumer tastes. This need for a balance between creative thought and business acumen perhaps comes easier than most for Mr Dumas, who holds a Master's in Law and Bachelor of Philosophy from Sciences-Po Paris, and is a graduate of Harvard Business School (advanced management programme). Married with two children, he spent eight years working for French multinational bank Paribas (which has since become part of the BNP Paribas Group). He joined Hermes in 2003 as an auditor with the financial department and went on to become retail director for France.
"We have become a US$30 billion company, we are in 51 countries and we have over 12,000 employees," says Mr Dumas.
"But we are, on the flipside, a creative company that gives very strong freedom to our creators, to our store managers, and this is part of the fantasy of Hermes, and that's very important.
"I think we're one of the rare companies that, in our executive committee, we have our artistic director, and the artistic director has a say on the course of the business. We want quality, but we also want growth. There is no opposition of the two, and if there is, we don't do it. I really think that we should not think too much in binary. At Hermes, you need to use your left brain and right brain."
Hermes is the quintessential luxury brand, but simply being flush with cash isn't quite enough to get one's paws on a coveted Birkin; one almost needs to be deserving of that honour with limited quantities of the bag available in boutiques. The preservation of such a stratospheric positioning is crucial for luxury marques, which maintain a high-end brand image but might also see revenue streaming in from more accessibly priced items such as silk ties or leather cuff bracelets. And Mr Dumas is well aware of the need to create that sense of desire.
The head of the jewellery department and leatherwear before being made chief executive, he has, alongside his cousin Pierre-Alexis as artistic director, managed to steadily maintain growth despite a slowdown in global demand for luxury. The company saw 2015 revenues reaching over 4.8 billion euros last year, up by 18 per cent from the year before, and growth in all regions. The group's key category of leather goods and saddlery grew by 13 per cent, driven by sustained demand and the increase in production facilities.
"I'd say I'm an optimistic paranoid," admits Mr Dumas.
"What we have seen in the last two years is a global slowdown of the industry where you can see major microeconomic effects, the slowdown of the Chinese growth, very strong instability in terms of currency, difficulty of economic growth in Europe, high US dollar, and last but not least, the terrorist attacks in Europe, which have made it a very challenging time, especially in Paris. So that, of course, has slowed down expectations of the industry. Having said that, in the long term, I'm very optimistic. China is going to grow again."
At a time when most brands are reeling from putting all their proverbial (Faberge) eggs into the booming Chinese market and feeling the effects of the country's luxury retail slump, Hermes has always taken a modest expansion approach. Today, its 23 stores in China (compared to Louis Vuitton's 50 or so boutiques on the mainland), and Mr Dumas's vast experience has perhaps prepared him for his role at Hermes, especially in understanding the beast that is the Chinese retail market after spending two years in the bank's Beijing office in 1995.
"It's a complicated question to answer, with honesty," admits Mr Dumas, when asked about the state of the Chinese market.
"We probably have less stores than a lot of other brands in Asia and that was our view, to grow steadily, and I think there's a tremendous potential in China and we're just seeing the beginning of it.
"We opened our first store in China in 1997, I was living there at the time, and we had seen starting the year 2000 an exponential growth because of the discovery of the luxury brand in China, and I think that what has been important with the Chinese clientele is that very quickly they have grown and they're looking for quality craftsmanship, away from logo-covered products. So, the Chinese market has always been good for us, every year. There's always growth."
As upbeat as he might seem, Mr Dumas is more pragmatically optimistic rather than blindly buoyant about luxury retail. And this is in no small part due to the hyper-exclusivity of the Hermes brand that lends it a degree of immunity from the volatility of fashion.
"I think we're not part of that circle, because we know where we stand," says Mr Dumas about the current designer merry-go-round, which has seen a string of creative directors leaving major fashion houses in the past few years.
"My uncle Jean-Louis Dumas always said: 'I don't look at what others do, I might be influenced.' There is a slowdown in the economy, and there're a lot of people who are asking: Do we have the right creator? Should we mix men and women? Should we change the date of Fashion Week?
"I think we need to leave some room for creativity, we need to be faithful to our creators and also try to give them a nurturing environment."
Through a devotion to the creative spirit, craftsmanship and a sense of romance and mystery, the fantasy of Hermes is allowed to unfold and evolve, year after year.
"I think there's a lot of gratitude first about all that have been achieved by my great-grandfather, my grandfather, my uncle, my mother - she was the managing director of all the production," says Mr Dumas.
"So each time I go to Hermes, which is every day, I salute them."
Chief Executive Officer
1971 Born in Paris, France
Bachelor of Philosophy from the Sorbonne
Master's in Law from the Sciences-Po Paris
Graduated from Harvard Business School
(Advanced Management Programme)
1995 Began finance career at Paribas, and was based in Beijing and New York
2003 Joined Hermes as auditor in the financial department, before going on to become retail director for France
2006 Named managing director of Hermes Bijouterie
2008 Appointed managing director of Hermes Leather and Saddlery
2011 Became chief operating officer of Hermes International
2013 Appointed CEO of Hermes International