This is an article from The Australian newspaper with Luc Perramond, chief executive of La Montre Hermès at the companys Australian head office in Sydney.
From: http://www.theaustralian.com.au/executive-living/luxury/hermes-watches-play-with-time-edge/story-e6frg8io-1226870693582
Ive copied and pasted it anyway. I've had to do so in two posts as the article is quite large but it makes for interesting reading:
Hermes watches play with time edge
THE 177-year-old Paris-based company Hermes is known for many things in the world of luxury.
When the company was founded, it was renowned for its harnesses and saddles. Over the years it has gained cachet as, among other things, a maker of the finest silk scarves, the most sought-after leather goods in the world and a purveyor of high fashion under designers such as Martin Margiela, Jean Paul Gaultier and now Christophe Lemaire (womens) and Veronique Nichanian (mens). And while the companys ready-to-wear, silk and leather products are known for meticulous craftsmanship, exotic materials and painstaking attention to detail, its watches have lagged somewhat behind many other luxury brands.
Five years ago Hermes was making nice fashion watches, accessory watches, sold mostly to women and mostly with quartz movements, says Luc Perramond, chief executive of La Montre Hermes, the companys watchmaking division. When Perramond joined Hermes in 2009 he brought 25 years of experience in the watch industry. My mission was to really transform the watch business into what I would say is a more upscale business which would pay more attention to the craftsmanship and to the quality and with a mission to make it a more integrated activity where we would have the watchmaking know-how in-house.
Although Le Montre Hermes was incorporated in Biel in Switzerland in 1978, the companys watchmaking tradition dates back to 1912, when it started making watch straps; timepieces were introduced into Hermes boutiques in the late 1920s. The first Hermes watch was a pocket watch that could be transformed into a wristwatch with an ingenious leather strap and was made for Jacqueline Hermes by her father Emile. (That watch, In The Pocket was re-released last year in a limited edition of 24 pieces.) From the 1920s through to the 1960s, Hermes worked with watchmakers such as Jaeger-LeCoultre, Vacheron Constantin and Audemars Piguet to produce movements for its watch designs. In 1978 that strategy changed when Jean-Louis Dumas succeeded his father, Robert DumasHermes, as the head of the family firm and created a new subsidiary for watchmaking in Switzerland; it was the first time Hermes had used craftsmen outside France. In keeping with the development of the quartz watch internationally, Hermes bought components and used them in their own designs, based on the companys equestrian heritage. Then, at the beginning of the 21st century, the revival of mechanical movements left Hermes languishing.
To become a credible watchmaker you need to pay as much attention to the inside, to the mechanical movement, as to the design of the watch, says Perramond.
Today the business is about two-thirds quartz and onethird mechanical. But I think we will be more in mechanical watches as we grow in terms of awareness and recognition in the market.
In 2006 Hermes bought a 25 per cent stake in the Swiss movement manufacturer Vaucher Manufacture Fleurier for a reported 25 million Swiss francs. In 2011 it invested in case manufacturer Erard and in 2012 acquired 100 per cent of Natebar, a dial manufacturer. We now have control over three strategic components that represent close to 95 per cent of the finished product. We are also the only watchmaking brand to manufacture our own leather straps in-house. Perramond says Hermes has no plans to acquire a hand manufacturer as it requires high volumes to have economies of scale, and we are not a volume business.
The acquisition strategy Hermes employed to become a mechanical watchmaker is increasingly necessary for smaller watch brands if they are to stay independent and grow their market share. In the past 20 years a once-fragmented Swiss watch industry has become concentrated into three main players: Swatch (whose brands include Omega and Longines as well as ETA, the biggest manufacturer of watch movements), Richemont (which owns Cartier, IWC, Piaget and Baume & Mercier among others) and LVMH (Bulgari, Chaumet, Dior, Hublot, TAG Heuer and Zenith). By acquiring stakes in a group of independent suppliers, Hermes has guaranteed access to components. The first mechanical watches it made in-house were released in 2012 and that year sales of watches increased 17 per cent based on these new lines.
Hermes is unusual in the watch industry in that its biggest market is its home base of France. We have grown fast over the last five years and each region of the world has been contributing to that growth but it is true that France remains our No 1 market for watches, says Perramond, who before joining Hermes spent 13 years with TAG Heuer and had a stint with the Brazil-based jeweller, H. Stern. In France a Hermes watch has become a very important gift when, for example, your son or daughter gets his high school degree. This is why, according to Perramond, despite the move into higher-end watches, it is important for Hermes to still offer entry- level products for its customers.
I would say we need to have some automatic watches that are about $3000 to $4000, which is why we will continue to work with ETA for some of our movements.
From: http://www.theaustralian.com.au/executive-living/luxury/hermes-watches-play-with-time-edge/story-e6frg8io-1226870693582
Ive copied and pasted it anyway. I've had to do so in two posts as the article is quite large but it makes for interesting reading:
Hermes watches play with time edge
THE 177-year-old Paris-based company Hermes is known for many things in the world of luxury.
When the company was founded, it was renowned for its harnesses and saddles. Over the years it has gained cachet as, among other things, a maker of the finest silk scarves, the most sought-after leather goods in the world and a purveyor of high fashion under designers such as Martin Margiela, Jean Paul Gaultier and now Christophe Lemaire (womens) and Veronique Nichanian (mens). And while the companys ready-to-wear, silk and leather products are known for meticulous craftsmanship, exotic materials and painstaking attention to detail, its watches have lagged somewhat behind many other luxury brands.
Five years ago Hermes was making nice fashion watches, accessory watches, sold mostly to women and mostly with quartz movements, says Luc Perramond, chief executive of La Montre Hermes, the companys watchmaking division. When Perramond joined Hermes in 2009 he brought 25 years of experience in the watch industry. My mission was to really transform the watch business into what I would say is a more upscale business which would pay more attention to the craftsmanship and to the quality and with a mission to make it a more integrated activity where we would have the watchmaking know-how in-house.
Although Le Montre Hermes was incorporated in Biel in Switzerland in 1978, the companys watchmaking tradition dates back to 1912, when it started making watch straps; timepieces were introduced into Hermes boutiques in the late 1920s. The first Hermes watch was a pocket watch that could be transformed into a wristwatch with an ingenious leather strap and was made for Jacqueline Hermes by her father Emile. (That watch, In The Pocket was re-released last year in a limited edition of 24 pieces.) From the 1920s through to the 1960s, Hermes worked with watchmakers such as Jaeger-LeCoultre, Vacheron Constantin and Audemars Piguet to produce movements for its watch designs. In 1978 that strategy changed when Jean-Louis Dumas succeeded his father, Robert DumasHermes, as the head of the family firm and created a new subsidiary for watchmaking in Switzerland; it was the first time Hermes had used craftsmen outside France. In keeping with the development of the quartz watch internationally, Hermes bought components and used them in their own designs, based on the companys equestrian heritage. Then, at the beginning of the 21st century, the revival of mechanical movements left Hermes languishing.
To become a credible watchmaker you need to pay as much attention to the inside, to the mechanical movement, as to the design of the watch, says Perramond.
Today the business is about two-thirds quartz and onethird mechanical. But I think we will be more in mechanical watches as we grow in terms of awareness and recognition in the market.
In 2006 Hermes bought a 25 per cent stake in the Swiss movement manufacturer Vaucher Manufacture Fleurier for a reported 25 million Swiss francs. In 2011 it invested in case manufacturer Erard and in 2012 acquired 100 per cent of Natebar, a dial manufacturer. We now have control over three strategic components that represent close to 95 per cent of the finished product. We are also the only watchmaking brand to manufacture our own leather straps in-house. Perramond says Hermes has no plans to acquire a hand manufacturer as it requires high volumes to have economies of scale, and we are not a volume business.
The acquisition strategy Hermes employed to become a mechanical watchmaker is increasingly necessary for smaller watch brands if they are to stay independent and grow their market share. In the past 20 years a once-fragmented Swiss watch industry has become concentrated into three main players: Swatch (whose brands include Omega and Longines as well as ETA, the biggest manufacturer of watch movements), Richemont (which owns Cartier, IWC, Piaget and Baume & Mercier among others) and LVMH (Bulgari, Chaumet, Dior, Hublot, TAG Heuer and Zenith). By acquiring stakes in a group of independent suppliers, Hermes has guaranteed access to components. The first mechanical watches it made in-house were released in 2012 and that year sales of watches increased 17 per cent based on these new lines.
Hermes is unusual in the watch industry in that its biggest market is its home base of France. We have grown fast over the last five years and each region of the world has been contributing to that growth but it is true that France remains our No 1 market for watches, says Perramond, who before joining Hermes spent 13 years with TAG Heuer and had a stint with the Brazil-based jeweller, H. Stern. In France a Hermes watch has become a very important gift when, for example, your son or daughter gets his high school degree. This is why, according to Perramond, despite the move into higher-end watches, it is important for Hermes to still offer entry- level products for its customers.
I would say we need to have some automatic watches that are about $3000 to $4000, which is why we will continue to work with ETA for some of our movements.