Axel Dumas, the executive chairman at Hermès, is evaluating the possible entry of the brand into Haute Couture since the brand navigates a challenging luxury market and, without a doubt, emerges quite unharmed compared to its competitors. In a period in which many of them decide to expand into travel, hospitality, and eyewear, Dumas insists on the fact that Hermès must remain focused, holding full operational control. "We could do couture, we don’t rule it out," he said, suggesting the possibility of exploring this high-end fashion opportunity. Indeed, this path has already been taken by giants in the luxury market, such as Chanel and Dior.
The brand, known for its iconic Birkin/Kelly handbags, silk scarves, and many more, kept performing exceptionally during a market slowdown, particularly in China. While its competitors, such as Kering, LVMH, and Richemont, went through a contractionary period in the region, Hermès achieved a 10% increase in sales in the first semester of 2024. The Maison, anyway, observed a decrease in demand for lower-priced items, such as silk scarves and perfumes. Even though these market challenges couldn’t drop Dumas’s confidence in the Chinese market, the attachment to the quality of Chinese customers remains, and this will be an advantage for Hermès.
The Paris-listed Maison has already outperformed all its competitors, with a 7% rise in the value of the shares this year, unlike LVMH’s, which dropped by a tremendous 14%, and Kering's 41% dive, largely due to the major underperformance of Gucci. Moreover, some analysts, including the ones from Citi, have come up with the prediction that Hermès will surpass LVMH’s Louis Vuitton as the most valued luxury brand by 2027.
Despite its great success, Axel Dumas creates even more distance between Hermès and its competitors by making clear that the brand doesn’t sell the same products as Louis Vuitton, so exceeding their size is not the goal. These affirmations arrive after a long-standing tension with LVMH's Bernard Arnault, who already once attempted a takeover of Hermès.
While the competition kept expanding aggressively, Hermès has remained careful. The company’s strategy consists of opening a new store in China each year and, reinforcing its focus on craftsmanship, recently after launching a leather goods workshop in Auvergne, France. “We are fairly cautious in our development," Dumas stated. "Of course, we’re not idiots: when there is a subsidiary that is over its budget, we pay attention to its costs. But on our strategic budget plans, nothing has changed."
Dumas saw Hermès value grow eightfold to around €215 billion after he became executive chairman in 2013. His mindfulness towards future challenges and succession planning, however, stays still active. Differently from LVMH's Arnault, who placed his children in operational roles, Dumas is preparing the next generation more tactfully, including them in secondary boards to evaluate their capabilities.
Thinking about the hard but beautiful decades that Dumas faced, he likes to remember the turbulent times of his beginnings while deflecting LVMH’s takeover attempts. He found his way up in the company through hard work and dedication, coming back from Harvard to France exactly when Arnault unveiled his Hermès stake in 2010. The crisis caused by the aforementioned stake and the brand’s fast growth forced Hermès to professionalize its operations. Despite the brand’s great success, Dumas keeps his guard up and says: "I still have time to screw up and make it a small company again!"