© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
March 4, 2014 3:18 pm
Hermès is back under family control, at least when it comes to chief executives. Last month, sixth-generation Axel Dumas took sole command of the luxury house founded in 1837 after eight years under non-family executive Patrick Thomas.
Mr Dumas is coming in at a time when the business is experiencing the pressures of unprecedented success – revenue increased 82 per cent between 2009 and 2012 to €3.5bn – including unwelcome interest from outside parties: in 2010, rival French luxury group LVMH bought more than 20 per cent of the shares in a move that Hermès’s then-management likened to rape.
The company is hoping 43-year-old Mr Dumas, a compact figure who favours double-breasted suits and wide lapels, will be their knight in leather-plated armour: he studied philosophy at the Sorbonne, law at the Institut d’Etudes Politiques de Paris and business at Harvard, and worked at French bank BNP Paribas before joining Hermès in 2003. Since then he has been finance director, headed the group’s jewellery department and leather division, served as commercial director of France and, more recently, as chief operating officer. For the past year, he and Mr Thomas were co-chief executives.
The experience will come in handy. On the LVMH issue, Mr Dumas, whose mother headed operations at Hermès and whose grandmother on her deathbed told him he had to protect the company just as a peasant protects his land, is known to feel as strongly as the rest of the family.
Bernard Arnault, the French billionaire who controls LVMH, has said that he does not intend to increase his investment. But the acquisition worried Hermès family members so much that they rushed to protect 51 per cent of the share capital – they hold about 70 per cent in total – in a special vehicle that will ringfence it for at least 20 years.
At the same time as trying to guard against any further incursion, Mr Dumas will feel the pressure to maintain – and improve on – Hermès’s current growth rate. Under Mr Thomas, group net profit reached €740m in 2012, up 156 per cent since 2009. “It is remarkable how successful they have been,” says Luca Solca, a luxury sector analyst at Exane BNP Paribas.
Detailed coverage from the catwalks of this season’s fashion shows in London, Paris, New York and Milan
But analysts say that continuing the strong growth requires expanding production – all done in Europe at present – which raises questions about finding and training new workers. As Mr Dumas told the Financial Times: “Our production is still centred on craftsmanship, which requires important training time.”
It takes about two years to train a craftsman, and each one is supervised during that time by existing craftsmen, which affects capacity further.
Mr Dumas also has the difficult personal task of following in the footsteps of the charismatic Jean-Louis Dumas, his uncle and the Hermès chairman for almost three decades, who transformed the business into a global luxury brand.
Known for his wit, if also for his lack of punctuality, Mr Dumas is intensely private and never speaks publicly about his wife, a US-trained journalist, and two children.
When it comes to business, however, Mr Dumas has offered a faint clue as to what may lie ahead: expanding non-traditional divisions such as ready-to-wear, jewellery and home collections to increase products on offer while maintaining exclusivity. The first test will come today, as the brand’s womenswear show closes Paris Fashion Week – and, perhaps, heralds Hermès’s next chapter.
Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.