By  on March 2, 1994

PARIS -- Hermes has broken into a gallop.

The 156-year-old fashion house is one of the hottest stocks on the Paris Bourse; its silk scarves and ties are in demand globally and its women's ready-to-wear -- given priority status by the company in the late Eighties -- is growing at a steady clip.

Hermes has been quietly making elegant women's clothes for nearly a quarter of a century. But in an attempt to develop a full fashion collection while not abandoning the company's trademark equestrian looks, chairman Jean-Louis Dumas surprised the French fashion world in 1988 by naming Claude Brouet women's fashion director.

Brouet, long-time editor of fashion and beauty at France's Marie Claire magazine, launched her first collection for fall-winter 1989-90. Based on projections made in 1992, Brouet's rtw designs, along with Hermes men's wear, were expected to generate 20 percent of Hermes International's total sales by 1997.

So far, the women's division is on track. In 1992, sales for rtw accounted for 7.7 percent of the firm's total consolidated sales at $32.2 million (189.7 million francs), up 7 percent from 1991 and 15.6 percent from 1990. Men's wear accounted for $14.8 million (87.5 million francs), or 3.56 percent of total Hermes sales.

Hermes's total consolidated sales for the year were $416.3 million (2.4 billion francs). Net profits in 1992 rose 45 percent to $29.8 million (176.2 million francs), from $20.5 million (120.9 million francs).

While divisional breakdowns are not available, Hermes's various operations have continued to run in the fast lane. All divisions -- save fragrances -- posted increases in 1993, with consolidated sales for the year rising 16 percent to $483.2 million (2.85 billion francs).

And since it went public, Hermes has been burning up the Bourse, launching last June at $50.84 (300 francs) and closing Tuesday at $90.84 (536 francs).

Dumas, in a recent interview at the Hermes flagship here, reflected on the move to hire Brouet and broaden the women's business.

"We needed someone who could see beyond the horizon," he said, adding that he was determined to develop a women's rtw collection that would not abandon Hermes's equestrian and silk looks, but would complement them with seasonal fashion color, fabric and styling trends."I didn't come here to do trendy clothes," explained Brouet from her offices at Hermes headquarters in the Pantin suburb just outside Paris. "Modern classics was the goal."

That goal seems to have been met in recent collections. Hermes now boasts a slew of classic, wearable looks, coupled with less traditionally cut items.

Fabrics range from cashmere and crepe whipcord for winter to gazar, linen and silk poplin for summer. Hermes is also strong in its leather apparel offerings for all seasons in light, soft suedes to dipped lambskin. And the firm's trademark silk items pick up on current or archived patterns from its scarf collections.

Prior to the recent move to expand its women's fashion, Hermes had a history of dabbling beyond the horsey set. The company's first garment, a suede golfing jacket, dates from 1925 and was purportedly made for the future Duke of Windsor. During the Depression, Hermes expanded into rtw with swimsuits, beachwear and skiwear.

By 1940, Hermes had five couture studios in Paris. But the couture activities were ultimately replaced by rtw in 1966.

In the early Eighties, Dumas asked Jean-Jacques Picart, Christian Lacroix's long-time business partner, for some fashion advice. At Picart's suggestion, Eric Bergere became the designer for Hermes's women's rtw. Hermes executives credit him with waking up the company's fashion, but Bergere ultimately left in 1989 over strategy disagreements.

Brouet's arrival brought a new dimension to Hermes. Her management style is unusual in the industry: When deciding how to reorganize the rtw, Brouet decided against using a single, or "star" designer whose name, or ego, could detract from the brand.

"The Hermes name had to stay preeminent," Brouet said. She also rejected the idea of using a team of lesser-known designers, instead choosing a team of more established designers, some of whom had their own rtw, or even couture businesses.

Brouet also works closely with Anne Wade, Hermes merchandising director, who visits all the stores and reports back to the fashion director about what's selling where, and what isn't.

"I am not a designer," Brouet said, unlike her predecessor Bergere. Her approach, she said, is to gather talent, get the best out of the designers, and select from their ideas the elements that would make up a collection.Her first team was made up of Myrene de Premonville, Tan Giudicelli and Thomas Meier.

Some designers came and left, including Christiane Bailly. The current team is composed of Giudicelli, who is also a member of Hermes's color committee that coordinates color themes for all Hermes products; Marc Audibet, who joined the team a couple of years ago and whose strengths, according to Brouet, are shapes and volumes seen most visibly in Hermes's long, flowing coats; Meier, who is the trench and jacket expert, and newcomers Michelle Meunier and Olivier Chatenet, owners of the directional Mariot Chanet rtw collection.

The addition of the almost avant-garde team behind Mariot Chanet might seem peculiar to the fashion observer, but Brouet stands behind the move.

"We all need to be looking to young designers," she said. Referring to Meunier and Chatenet, Brouet said she valued their personal work values as shown in the design and manufacture of their own collection.

"They are very rigorous, very careful and precise. They are perfectionists," she said. "That's very important."

Brouet admits however, that she had to learn some bare essentials about the rtw business, including the basics of manufacturing and delivery. She said she knew nothing about production, or about how to check the quality of fabrics, skills that she has since acquired from on-the-job training.

"There are plenty of designers with great talent, but one also needs to understand production, distribution and on-time delivery," Brouet explained. "If you don't have those, even the most beautiful collection will be useless."

As the rtw has developed into a full collection of 80 to 90 models per season, the company has set out to educate Hermes store managers and salespeople on how to properly select and sell the apparel. Also, many stores, including the Paris flagship, have been or will be expanded to accommodate and better display the rtw collection.

These efforts have started to pay off, said Gilles Duval, Hermes's deputy managing director for distribution.

The firm has a total of 185 freestanding stores worldwide, 59 of which are wholly owned and represent 55 percent of sales. Remaining units include "concessions" operated in partnership, duty-free shops and in-store shops in various international stores, including Barneys New York and Neiman Marcus in the U.S., Harrods in London and Takashimaya in Tokyo.The strongest markets now for Hermes's rtw are France and Japan. France represented a 37.5 percent share of sales in 1992, with other European countries accounting for 19.9 percent, Japan 12.4 percent and the U.S. 10.7 percent.

Duval warned, however, that certain markets, such as the U.S., have yet to reach their potential.

"The rtw performance there is not as good. We need to grow," said Duval. "We need to train all of the salespeople about the line. In the stores where the competence is there -- like New York, San Francisco and Palm Beach -- the goods sell."

Merchandising director Wade reported that the New York store achieved an 82 percent sell-through on the women's rtw for fall-winter 1993-94, compared with 68 percent in the comparable 1992-93 period.

While the French customer tends to buy the collection across the line, Brouet said that in the U.S., bestsellers are typical Hermes: riding jackets, redingotes and jodhpurs.

The Japanese customer, meanwhile, tends to go for the silk print looks, Duval said.

Italy is perhaps the weakest market for the rtw, Duval noted, mainly due to the weakness of the lira against the franc, and the overall poor Italian economy.

Bad economy or no, retail prices -- $2,373 (14,000 francs) for a cotton and silk faille evening skirt or $3,898 (23,000 francs) for a cashmere redingote -- won't be coming down soon.

"If we wanted to make it less expensive, we would have to use lower quality fabric....Things will disappear," said Brouet. "I am not prepared to get rid of the little details that make a piece of clothing expensive, but unique."

And there is little probability that a second, less-expensive line will be introduced.

"We will never go down," said Brouet. "Say we did do a [second line], where could we sell it? It would lose the magic."

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