STAYING THE COURSE
Given his extensive experience with La Montre Hermès, CEO Laurent Dordet is well poised to perpetuate the creativity and craftsmanship in its watches
When it comes to filling a CEO position at a watch manufacture, it’s all too easy to follow the common practice of parachuting an outsider with the relevant experience in, but such a move wouldn’t necessarily work at La Montre Hermès. For one, the position demands an intimate understanding of the brand, which has staunchly remained independent to protect its brand equity and philosophy – that an Hermès product is as much a functional object as it is a work of art. Besides, much finesse is required to steer a business that’s slated to drive the group’s growth in the years ahead. There’s also the question of synergy: How would the CEO play off the maison’s other lines to create watches that inhabit a cohesive product universe?
The criteria may be exacting, but Laurent Dordet was more than equipped to meet them when he took over as La Montre Hermès’s CEO in February 2015. Dordet’s career at Hermès started in 1995 as its CFO. Lengthy stints in various divisions followed, including Holding Textile Hermès, Hermès Cuirs Précieux (precious leathers), and Hermès Maroquinerie-sellerie (leather goods and luggage). La Montres Hermès was a natural progression, and his expansive exposure honed a keen perspective that proved advantageous, as the division reported positive growth despite tepid market conditions. Challenging times look set to continue, but Dordet is still putting the products and the know-how behind them first at La Montre Hermès. This is, after all, what the maison has been doing since it was founded.
You’ve helmed La Montre Hermès for just over a year. How has it performed, and what are your current concerns?
The market last year was volatile due to many different political and economic factors, and it caused our results to vary both from month to month, and from market to market. Despite these conditions, which led to poor performance in a few areas like Asia’s travel retail market, there was reasonable overall growth, which was satisfactory. The environment looks similar this year, which is challenging, but I see a lot of potential in La Montre Hermès’s medium term future, because we have an established core business and another fledgling one. The question now is the short term. I cannot make any predictions about the final result, but I will still try for positive growth in 2016, just like last year.
What are the “established” and “fledgling” businesses that you are referring to?
The established one is, of course, our women’s watches, which have been very well-known and successful for the past 40 years. If we develop this further by opening new markets, improving our communications, and creating new lines like the Slim d’hermès, then we will see even greater success with them. Our relatively new business is the masculine market. We have invested a lot into this segment over the past 10 years to acquire the know-how, and to integrate our production vertically to create a proper manufacture, which we now are with 98 per cent of our components are produced internally. This effort and its results are being increasingly recognised by watch specialists, so we want to continue working our way up to be on par with the best brands in the industry.
Does being part of a maison help La Montre Hermès in stormy market conditions like this?
Yes, absolutely, because 70 per cent of our business is done within Hermès boutiques, which offer all of the maison’s metiers under one roof. These stores are far more resilient in difficult market conditions because of this, as they have the advantage of the brand’s image, and the ability to offer the entire Hermès universe to the customer. Inhouse boutiques also give us the advantage of complete information. Since we manage them ourselves, we know our inventory levels, which products are successful, which are not, and why. Finally, inhouse boutiques offer insights into who we are selling our watches to, for better customer relationship management.
What about the other 30 per cent of your sales?
The remaining 30 per cent of sales comes from external retailers, which was generally successful except in Asia. Multi-brand stores follow a “prescription-based” model – sales staff recommends watches, and buyers get to do comparison shopping. This is important because our watches need to be seen and sold out there alongside those from other brands.
We see that several high-end brands with multiple product lines have begun taking their watchmaking businesses more seriously. Louis Vuitton, for example, now has some of its watches certified Poinçon de Genève. Do you think there are limits to where a maison like Hermès should go when it comes to watchmaking?
Every brand takes its own path. We are happy that the one we took has given us the ability to produce our own straps, dials, and cases, while Vaucher Manufacture Fleurier, which we have partial ownership of, supplies our movements. I think that technical expertise is absolutely necessary, and Hermès needs to be at the level of the best brands out there. However, we will not win the battle by being better technically. Our ambition is not to surpass Patek Philippe. Let’s be frank and humble here – our skills will not exceed theirs. We have to elevate ourselves to the level of Jaeger-lecoultre, or Cartier, and then use the know-how
that we have acquired to express a different type of creativity, and our own point of view about time. Le Temps Suspendu, for instance, isn’t a gimmick, but one such point of view. It’s a statement about our vision and perspective of time as something that is qualitative, rather than quantitative. We may be interested to have some certification that confirms our watches’ technical excellence one day, but for now, we are happy to be recognised with Grand Prix d’horlogerie de Genève (GPHG) prizes once in a while.
Is the current stable of in-house movements sufficient to express your philosophy of time, or do you think there’s more work ahead?
There is always more work to be done, but I think we have the right tool in Vaucher Manufacture Fleurier, which allows us to develop new movements. We also have a partnership with Agenhor, which we are very happy with. They are more than enough for now.
Hermès also showcases metiers d’art techniques in its watches, and communicates openly about the craftsmen behind them. What are the reasons for doing so, and how has this paid off for the maison?
It’s simply because we have nothing to hide. Why present a miniature enamel painting from Anita Porchet and claim that it’s ours? Hermès is authentic, so we tell the truth, and that’s it. The Arceau Millefiori’s dial, for example, was made with a technique we developed ourselves, so we said so. The shaded enamel technique on the Arceau Tigre, on the other hand, was jointly developed by the husband-and-wife team of Olivier and Dominique Vaucher based on an idea we had together, and that’s what we said. I think the biggest payoff for us is that our customers are very loyal to the brand, because they know that they are paying for value and not marketing.
You have been collaborating with external craftsmen for quite some time. Don’t you think it’s about time to start developing your own in-house expertise in this area?
No, because there’s no purpose in itself to integrate such know-how. We have fantastic partnerships with some of the best craftsmen from around the world, and if they want to remain independent and work with multiple brands, it’s fine with us. More importantly, we want a win-win situation where we get to propose our ideas to them, and they are willing to lend their skills to help us tell our story, or express a point of view artistically. Luxury is about rarity, so having too much of anything in this industry is not good. Techniques or creations don’t necessarily need to be confined to just exceptional pieces, but they must not be produced in large volumes. It’s not a quest to develop hundreds upon hundreds of pieces every year. Projects must be unique and have limited runs.
Hermès has several product lines, and we can see some crosspollination between them, such as the Slim d’hermès Mille Fleurs du Mexique, whose dial design is from an Hermès scarf. What other advantages are there in being a part of a maison with multiple metiers?
Creativity. We will not win the game with superlative technical expertise, but we can be different with our style, designs, and storytelling. There is no doubt that our watches’ designs are good, and this is partly because we benefit from the creativity of 14 other metiers behind us. Sometimes, they take ideas from the watches we create, and at other times, we are inspired by them, whether it’s tableware, scarves, or something else. It’s cross-fertilisation, and it’s a huge advantage.
And naturally, ideas are the most precious commodity for a maison like Hermès.
Yes. This is where we can bring something different to the market.
Slim d’hermès Mille Fleurs du Mexique
The Arceau Le Temps Suspendu displays the time only when its pusher at nine o’clock is actuated
Slim d’hermès QP, the winner of 2016’s GPHG Calendar Watch Prize
Left: The Arceau Millefiori’s dial is the first time the millefiori technique has been used in watchmaking; Right: The Arceau Tigre, one of Hermès’s 2016 novelties, uses a newly developed shaded enamel technique on its dial