Buro 24/7's Mira Duma in conversation with Hermès' CEO Axel Dumas
"I love Hermès"
T he world of Hermès is a wonderful one. Balancing heritage with invention, the French luxury brand is not only credited as being the first company to launch an e-commerce store but the first fashion house to collaborate with Apple. Now, as the Hermès Wonderland opens in Dubai, Buro 24/7's Miroslava Duma sits down with the Hermès CEO Axel Dumas to discuss design, direction and today's digital world...
Your background is in banking. Can you tell us a little bit about that period before you decided to finally join the family business? I think it may have been seen as an obvious step by others, but maybe not by you...
To be frank, I had never imagined myself working for Hermès. It was mostly the work of my uncle, who was the CEO, and the work of my mother, who was the Managing Director of Production. It was their thing and quite frankly it took up a lot of family time (laughs)! My first steps at Hermès took place when I was fourteen; I tried to learn how to stitch. I couldn't even stitch in a line.
So you were an intern?
Yes, an intern. I'm very bad at stitching. I can't stitch to save my life but I can polish pretty well (laughs). After I finished studying political science I really wanted to go to China. I applied for a lot of jobs in China and the only one for me was in banking. So I started banking, and actually, it was quite a lot of fun.
Why did you want to spend time in China in particular? Why not Russia, for example?
To be frank, that was my second idea. It was my interest in literature that made me want to go to these countries — Dostoevsky for Russia and Malraux's "La Condition humaine" for China. I wanted something different from New York or London, something a little bit more exotic. I went to China for two years, then I worked in Paris for a bank. Afterwards I spent four years in New York. When I was in New York, my uncle Jean-Louis Dumas, who was then the CEO, came to see me. He was starting to get sick and he asked me if I would like to join the company. I have to admit that I was quite surprised, but I said "yes".
Because can you really say "no" to Hermès?
Maybe it would have been wiser to say "no", so that they'd court me a little bit. But I did say "yes" and he asked me what I wanted to do.
Did you say that you wanted to be CEO straight away?
No, I was much more humble (laughs). I said: "Anything you want, which would be better for the company, except finance". So he made me start in finance for a year and then I was the Retail Manager for France. Then I took over the smallest métier of Hermès at the time, which was jewellery, although this is now one of Hermès' fastest growing métiers. Then after a stitch in the leather department I became CEO.
It was a great achievement and I would even say a victory to keep Hermès independent. How did the company and the team manage to do that?
Let's look at things in perspective: I'm the sixth generation of the family, so Hermès has been part of the family for almost 180 years. Why is it important that it's a family-owned company? Probably because we want to keep the values of Hermès alive and true — that craftsmanship, that quality and that spirit that exist at Hermès. There is no marketing department, there's freedom of buying and there are a lot of things which are a little bit crazy. That's why we were fighting for Hermès' independence in terms of shareholding. Also we knew that we didn't want to depend on banks so we tried to be cautious.
This's why I'm saying Hermès is pretty unique and what you've done is literally a victory.
Yes, I hope to keep it that way. I love Hermès and I can fully understand that other people want to love it too (laughs).
They just cannot resist!
They cannot resist, maybe. You know, they can resist everything except temptation (laughs). But for us it was not a question of finance, it was a question of principle. The family decided to put our 51 percent of shares in the holding compan, which cannot be sold for twenty years. It was a big commitment for the family, because it took a lot of their holdings. But having said that, it took less than one hour of discussion to come to that decision. They said: "If it's a good thing to protect Hermès, then we are all agreed and we will sign it". It reflects a big commitment from the family to the company and also a big commitment from all of the staff to help us stay independent.
Do you think Hermès will be able to keep its independence in the future? What are the plans?
I think we will do everything we can to keep Hermès independent. I'm quite confident we will manage to do that. Having said that, I don't know if there will be other battles or if there will be any more people trying to conquer us. When you are working very hard, you sometimes encourage envy.
Exactly, you have lots of risks and I guess there are people around you who are envious. But if you're doing an amazing job, it means you can resist.
This is true.
In your view, what are the most important things when managing a company like Hermès?
I think there are two things that are most important. The first is respecting and maintaining your heritage, which for us means retaining a very strong craftsmanship and respecting our history. And the second thing is not to be afraid to change what needs to be changed, in order to remain relevant in the contemporary world. We are over 180 years old, but we have always managed to change and reinvent ourselves.
The first person in the company who reinvented himself was Émile Hermès. He did two important things. When he was 27 years old he decided that Russia was a big market and he went there. It took him two years to go to St. Petersburg and Moscow and then he started to sell to the Tsar and then he came back. It was our first foreign success. The second thing that he saw, which was less good for our business, was that the car was replacing the horse. It was a big issue for Hermès, because we had been selling to the equestrian market for one hundred years. And Émile was the one who reinvented Hermès by keeping the craftsmanship and adding women's bags, silk, ties and ready-to-wear. I think Hermès has always had the capacity to reinvent itself — that's what you need to keep in mind, when after six generations, you try to reinvent a company. You need to keep things that are very important like quality and craftsmanship, but also emphasise the role of creation. There is a very short brief that we give to our creators and the result is really their view of the moment. On the other hand, there's freedom of buying. It means that every store has the choice of saying, which items they like, thus all our stores are different from one another. There is no one goods supply chain and it's only possible because we are craftsmen and not industry.
It's interesting that the majority of brands are following the rules of the industry. Trend forecasting agencies dictate what colours designers should use, fashion houses are obliged to produce both seasonal and inter-seasonal collections. But this doesn't guarantee them any success. Hermès creates its own rules and you are one of the most successful companies in the world. Again, that's pretty amazing. How do you do it?
You should always be very humble about your success. When I was a kid, Hermès was not as big as it is now. The values of Hermès were not always as popular. It's even tougher to keep these values alive when you're successful.
There is a hero in Greek literature called Ulysses. He confronted many issues during his travels, sometimes for the bad and sometimes for the good. Even when he was with a goddess, he still left to continue his journey. I think what is important about this story, and what we apply within Hermès, is that it's difficult but important to stay true to yourself and your mission. And our mission is about the mix of creation and craftsmanship.
Hermès is the essence of luxury where craftsmanship is a priority. Sometimes luxury brands are a little conservative in terms of accepting technologies. Hermès was one of the first to launch an e-commerce platform back in 2001, almost 15 years ago, when everybody was talking about the fact that we lived in a digital era and the Internet was the future, but no one was really doing anything significant about it. At that time a lot of giant brands hadn't yet done e-commerce. We all know what's happening now in the digital and tech worlds. How does Hermès find balance between tradition and innovation in technology?
It's always a fine line. But I think that digital is not a matter of innovation, it's a matter of looking where the world is going and trying to embrace it instead of resisting it. You know, when we launched an e-commerce platform in 2001, it was the decision of my uncle. My cousin Pierre-Alexis and I were young, we were saying that we need to look at the Internet and what the others are doing. Everyone was pushing for the creation of a website to tell the Hermès story. And he would say: "I don't need to explain the story of Hermès, people need to live it and feel it. What I am is a merchant and we have a store, so what we are going to do is to open a store". We were the first ones to do it and we did it on a very small scale in the beginning — only in the US, selling perfume and ties.
What I find funny is that the discussion now is similar to what was happening in the '70s. At the time it was not about digital, of course, but about "should we go international or not". And people were saying that there was no need to go international, because the world was coming to Paris, and it would be too risky. They didn't know if it was going to pay off. Fortunately for us the decision was "let's go"! And I think it is the same with digital. You can say that our stores are doing well, why should we go digital? Is it a luxury experience? But in ten or twenty years people will want to have a relationship with you in the digital realm, be it for buying, for communication or just for information. So we need to do it now to get ready and to do it with our own philosophy and style.
The second parallel with this period, which I find funny, is that when French luxury companies started to go international, most of them decided to do it via licenses to reduce the risks. But we decided to do it on a much smaller scale and to control it. I think this is very important for digital. If you really believe digital is strategic, then you probably shouldn't get someone else to do it. You should do it yourself. Although maybe we don't have the economy of scale and we did made mistakes in the beginning, it's still important to control it. And that's why we are investing a lot to develop our digital expertise within Hermès and not just delegating it to someone who is bigger.
Are you following the digital world and these amazing start-ups that are actually changing our lives every single day? What is the first thing we do in the morning? We brush our teeth, check Instagram, Facebook and emails. The Internet has changed our lives completely. I recently came back from the New Establishment Forum in San Francisco, where people like Elon Musk, Marc Andreessen and Mark Zuckerberg were speaking. At some points I felt like they live in the 22nd century while we still living in the 21st. They were talking about investing in space programs, virtual and augmented reality, the Oculus Rift project that Facebook invested $2 billion dollars into... A lot of things are happening, take Google Glass or Apple watch, for example. Can you tell us a little bit about the collaboration with Apple that everyone is talking about? Honestly, I thought it was genius.
We have always had a lot of respect for Apple and, vice versa. Jonathan Ive has a lot of Hermès objects.
He is considered one of the greatest creative minds in history, so for him to collaborate with Hermès — a great compliment.
As a CEO I don't like collaborations and it was the same for Apple. When we met with Jonathan Ive we discussed our philosophies and views and they were very similar. So we decided to give it a try. I must say that the product itself is very beautiful. It combines the craftsmanship and the sharpness of the Hermès design and Apple technology. That's how we launched it. It was not a worldwide master plan for global domination; it was about mutual respect and admiration, about making a product. That's what I love about Apple, when we talk about all the things in the 21st century and the software behind Google, Facebook or IBM. What is important about Apple, and that's what we share, is that they keep making objects, they care about objects and they make things that are quite addictive, especially to me, as you may have noticed (laughs). If you spend 90 percent of your day with an iPhone, it is important. They still care about typography and details.
We had a discussion with Jonathan Ive and with the craftsmen about changing the watch slightly. The sensor really needed to be on your wrist, but it didn't allow you to move as it's usually done. It was a very old craftsman, a lady, who found the best solution. I think we have many shared values with Apple. I respect them yet they're a very different company. The purpose was not to make something cool; it was to have fun and to try to create a beautiful product.
I think it's great that you brought technology geeks to the fashion capital of the world. The day after the presentation at Paris Fashion Week I was flying with the Apple team to San Francisco for the forum. They were pretty excited; they told me that Steve's wife was also there at the presentation. I had a long conversation with an old friend of Steve Jobs, it was his first time in Paris during fashion week and he was very excited. They reminded me of kids who found themselves in Disneyland for the first time. They loved and admired this world, which is so different to theirs.
I think in a way we are quite different. We selected a number of cities that had Apple stores and we decided to do the training for the sales staff together. It was great to see the two teams mixing together. It was easy to see who is who, because some wore T-shirts, while the others wore suits and ties. It was a very nice experience to see the teams from different environments mixing together, but still sharing a common point of view. Most importantly, we had a lot of fun working on this.
How important for you are the modern means of communication with your clients that we now call social media?
I think for Hermès it's something that we can still improve on because we are always very cautious about having a very particular message. Sometimes it can be a bit unsettling for a brand. We need to find our own way to communicate. A part of what we do is to add to the mystery. We don't show everything. My uncle says that you don't show the kitchen of a good restaurant. How do you deal with all the envy and the constant flow of information on social media and still keep part of the mystery? We need to find the right balance, but I do think that with social media we still need to do better. We have Instagram, which is much more visual, and we are a very visual company — this has opened a new avenue for us.
Talking about the "kitchen", in your case it's so beautiful that you can show it to the public. Once in the Hermès factory I saw some very talented craftsmen in white coats making Kelly bags and silver bracelets by hand. And I saw the film, which I thought was amazing. We should bring it to Moscow, if that's possible, with Sophia Kapkova and the Center of Documentary Cinema. I think this is what you need to show people because everybody understands that Hermès stands for the highest quality handmade products that you can imagine, but still when you see it and witness it, you re-think the whole process and, to be honest, your perception of the brand changes.
I think we have three things that make us very different. The first one comes from Jean-Louis Dumas — it's the care we put into our manufacturing. His view was not to show it to anyone else. He said: "You need to have a beautiful setting to do beautiful things", and that's why we care a lot about the architecture of our buildings.
The second thing, which is important, is that we always try to keep it at a human scale. That's why we don't say that it's a factory but a manufactory. We try to keep the number of staff to 200-250 people, because we believe that above that the manager won't know everyone by name.
And the third important thing — apart from the cutting — every bag is made by one craftsman only. We could have it a bit more standardised, with each craftsman doing his stage of the process but for us it's very important that one person makes a bag and signs it at the end. I think it shows our respect for the craftsmen and also, it's not quantifiable, but it gives the product more soul. Some people get attached to their bag and they have to let it go.
It's very funny when a bag comes back for polishing and they find that it's a bag that they've made — they get quite emotional. I think there's nothing quantitative about that, you cannot quantify that, but it's part of the magic of Hermès.
What you've created with the bags especially, and I'm a big fan, is really amazing. I was in Paris during fashion week and my partner asked me to go to the Hermès shop and to help her to buy a bag because she thought it would be easier to do that with me. So we stopped by and there was a long line of mostly Chinese people waiting for a sales assistant. Very humble, my partner and I got into the line. Luckily there was a woman from Hermès who recognised me and invited us in. My partner explained what she wanted to see, it was a pretty expensive thing. With a typical French patronising expression on her face she said she would try to find it... I thought to myself that it is really fantastic —the company has created a phenomenon. People are prepared to queue for something extremely expensive that according to one research only one percent of the world's population can afford. You've created something that zillions of other brands are fighting for but cannot achieve.
I can say two things to that story. First of all, I'm sorry for the line. We'll be doing some more work in the Faubourg store so there's more space.
No, it's just because I think that the demand is astonishing.
Yes, but still when I see this line, I cringe a little bit.
We, as clients, only see it as a huge success!
The second thing, which is remarkable, is that at the time when huge demand for the bags began to appear, we were much smaller, so we were very excited. I remember I was quite young and there were no waiting list, to come back to your story. It was done totally organically. While everyone was trying to deal with the issue, the waiting list was created on desirability, but it was not something planned at all. It is strange to see other companies launching bags and saying, "there is a waiting list" from day one. We did not compromise on the product itself — people are ready to wait because when they have their bag, they will have a genuinely exceptional bag. It is done as it has always been done by our craftsmen — in authentic and genuine leather.
The Hermès Wonderland in Dubai is open February, 2016.