French luxury maison Hermès is a commercial, aspirational powerhouse. With an array of métiers that includes the founding line of leather goods and saddlery, through to silk, textiles, ready-to-wear accessories and perfumes, the brand continues to expand.
Adored by consumers, revered in business terms, the Hermès brand is stronger than ever in its French homeland and becoming ever more embedded in consumers' desires all around the world. The brand’s collections now comprise over 50,000 items, all spread across the differing métiers, or sectors, they specialise in.
The watch division represents five per cent of the group’s total business and it is poised for more focused development. La Montre Hermès last year recorded 17 per cent growth with sales of €173 million. Leading the charge is CEO, Luc Perramond, who is deploying his formidable business acumen to elevate Hermès timepieces to new heights. This means watches that are built to more exacting standards, a commitment to selfsufficiency, and proprietary mechanical movements. In short, a drive towards higher horological mastery.
The first Hermès watches with in-house mechanical movements debuted at Baselworld in 2012 and Perramond has been keeping his eye on the target ever since. Speaking to him at Baselworld 2013, Perramond was gracious and friendly as ever, and concise in his aims for La Montre Hermès.
“As a brand, Hermès, who we are as a watchmaker, we want to be received as a serious watch brand and we are committed to watchmaking in the long-term – but at the same time we are very singular and distinctive, bringing in a new perspective to watchmaking with our own values. The values of Hermès, which are more emotional.”
Perramond refers to the appeal, often subconscious, that some brands embody. That magic alchemy that casts a spell over consumers and inspires brand loyalty with genuine longevity. Perramond describes the values of Hermès timepieces as, “Poetic, rather than pure performance or rationale, like some of the Swiss watchmakers. We definitely have a strong place in the watchmaking world, but our own unique positioning.”
La Montre Hermès was founded in 1978 by Jean-Louis Dumas who, in an unprecedented move at the time, shifted operations for this part of the business to Switzerland. Dumas knew that the company had to be located at the heart of the watchmaking pro- fession in order to absorb the vast amount of knowledge and science required to construct fine timepieces. However, things were not rushed and it took 34 years for La Montre Hermès to launch their first ‘in-house calibre’ – the H 1837. This first proprietary movement arrived last year in time for the brand’s 175th anniversary, and is so named in
honour of the year Hermès was founded.
This considered approach with a gracious lack of haste is certainly typical of the brand’s sober and meticulous principles. And they intend to proceed in the same vein, as Perramond states, “We will continue our development towards fine watchmaking, to which we are very committed. We want to develop our know-how more and more. After the first in-house movement last year, which was a simple three hands movement, we introduced a chronograph – which is a nice complication. We like it because it's the most noble complication in watchmaking, and it’s also the most useful, and at Hermès we like useful objects. It's important that there is a function that makes sense – for us it’s a new step. We are going to make a family of manufacture movements in-house and slowly develop that.”
One of the less functional, but certainly inspired and whimsical creations from the brand is the ‘Time Suspended’ or Le Temps Suspendu, which has been incredibly well received. The watch has a novelty whereby you can activate a pusher on the left side of the case and the hands leap together, ceasing to function. The movement still keeps time though, but you can't see it on the dial. Press again and your moments of timelessness vanish, the hands flick back and time marches irrevocably on once more.
Launched in 2011, and devised under the towering expertise of master watchmaker Jean-Marc Wiederrecht, this watch consolidates the real power of the Arceau collection to which it belongs. Commenting on the collaboration with Wiederrecht, Perramond says, “We started to work with Jean-Marc five years ago and we told him we have this very special philosophy of time, where we see time as a friend. Time is a very precious resource for us to make beautiful objects in. We brainstormed a lot and at some point someone said, ‘I wish we could stop the time because we’re having such a great discussion’ and that led to the Le Temps Suspendu.”
This special approach to time and these artful collaborations look set to drive the brand forward, and Perramond adds, “We believe in the notion of a time to dream, because it’s a territory that is really perfect for us. It is very emblematic of what we do – poetry with fine watchmaking – and so we have new ideas for new concepts where we can explore the idea of playing with time, creating your own time, interacting with time, because time has so many qualities. So Jean-Marc is working on a new concept and we are working with a lot of other very talented watchmakers in Switzerland.”
The Arceau range forms a particularly strong pillar for La Montre Hermès and is inspired by the world of equine elegance the brand is rooted in. “What we have seen in the last three years is the Arceau collection slowly becoming the most iconic design, and the most iconic collection. It is very interesting because Arceau was created in 1978 and is the oldest watch design for us – it's really showing a lot of strengths, it's a strong signature. You have these asymmetric lugs attached to the strap, which reminds people of our equestrian roots with the stirrup, and you have those numbers dancing around the dial. It’s a very powerful design and is emerging as an iconic one,” Perramond says.
Now approaching his sixth year as CEO, Perramond is notably optimistic about the watch industry in general and he believes there is a lot of potential in foreign markets. “We can see that the Euro is very resilient, in spite of the macro economic turbulence. I think the US has huge potential; it has been overlooked because the US is the largest luxury market in the world by far, in terms of value. I think the industry has had a tendency in the recent past to overlook the USA and focus too much on China. And what is happening in China now is just a normalisation of the situation, because it was out of hand for the last three years, growing way too fast. This was unrealistic and not reasonable so has been normalised. Japan, which was traditionally a very important watch market, is coming back strongly, which for me is a very healthy sign that the traditional watch markets, like the USA, Japan and Germany, are really still growing.” he states.
“We have new ideas for new concepts where we can explore the idea of playing with time, creating your own time, interacting with time, because time has so many qualities.”
“We want to develop more complications, but if we launch a new complication, it has to be with a twist. We cannot just do another tourbillon.”
The brand has a solid and stable world presence and with regard to expansion into new markets, Perramond has his eye firmly trained on the Middle East and Indonesia. As he explains, “We are quite well-balanced between Europe, America and in Asia, and we have future drivers of growth in Asia too with a country like Indonesia. There is fabulous potential with a strong appetite for luxury. It’s a market where domestic consumption is driving the economy, not exports but domestic consumption. So it's a different business model than China and I expect a lot from Indonesia.”
Concerning the Middle East, Perramond adds, “There is a lot of potential there too, we are growing in double digits and now Hermès has a good network in the Middle East – in the last five years we have opened flagship stores in Dubai, Bahrain, Doha, Abu Dhabi, Beirut and recently in Kuwait. The only market missing now is Saudi Arabia, which will be the next priority. Business is really starting to take off as we have the precious collection for ladies and the full range now for men with mechanical complications and high- end watches – so the Middle East is very important.”
La Montre Hermès are plotting a smart and strategic course to ensure consistent marked growth of the brand, and they are doing so with a dash of playful magic, infusing their watches with a welcome dose of joie de vivre. Expect to see more nonconventional complications, which is something of a signature for the brand now, and more unpredictable fun. As Perramond concludes, “We want to develop more complica- tions, but if we launch a new complication, it has to be with a twist. We cannot just do another tourbillon – it has to be something special where we bring some new value – so it's in the pipeline and you will see something for the end of this year. You will see a nice surprise and in the future, even more.”