PARIS — There will be color, teased Axel Dumas, chief executive officer of Hermès International, revealing a few details about plans by the French luxury firm to launch a makeup line next year.
“For the moment, we are starting with makeup, it’s a long-term plan, we will launch in 2020, with an announcement when we are ready — we still have to finish the products,” he said, speaking to WWD after the company’s annual shareholder meeting, where executives fielded questions about crocodile slaying, leather alternatives and Brexit stockpiling.
“All large houses have three axes, it’s a natural development — it’s a natural development for us,” he said, referring to luxury groups that sell perfume, makeup and skin care. Perfume, along with watches, is one of the few products the company sells outside its own retail network.
“Color — that’s something that characterizes us, at any rate,” he added, dropping a hint about the new product line.
Asked where production would take place, he mentioned Italy and France, and added that it would depend on each product.
The executive resigned from his board position at L’Oréal in April, citing plans to launch a cosmetic line at Hermès, a potential conflict of interest.
“I preferred to resign in order to have an irreproachable position in terms of conflict of interest,” the executive explained to the shareholders assembled at a cavernous conference center hall.
Skin care will come later, he revealed.
The plans also fit into the company’s geographic balance, he explained, noting that the European markets tend to favor perfume, the American markets on makeup and the Asian markets on skin care.
“Our ambition is to be a global company also in this sector,” Dumas said, noting the move is also meant to balance growth in the company among various products.
“We’re looking for homogeneous internal growth,” he added.
The perfumes division accounted for around 5 percent of the company’s annual sales of nearly 6 billion euros last year.
Asked about conditions for slaying crocodiles, Dumas said that the company has veterinary guidelines that are “much more demanding than local regulation so that animal well-being is respected in each farm — it’s essential, part of Hermès’ projects.”
Hermès in 2015 tightened requirements for its crocodile skin suppliers after Jane Birkin asked the luxury house to rename the fabled “Birkin bag” — a crocodile leather skin handbag style named after her — until fairer treatments of the animals were put into practice.
Larger rival Kering, the owner of Gucci and Saint Laurent, recently threw the spotlight on animal welfare, issuing open-sourced guidelines on the subject last month, following three years of research.
Another shareholder asked about leather alternatives.
“I am fundamentally attached to this material,” Dumas said of leather, noting that he has observed a decrease in quality due to “industrial farming conditions.”
“The quality of the leather is essential,” he added, noting the company increasingly has to keep tabs on where it is produced, and even invest in tanneries or farms.
“I think it’s much more of a problem of public health, than a problem just for Hermès.…It’s worrying because it’s being reinforced and is accelerating,” he said.
“Hermès is not just a museum of craftsmanship, we have to invest and consider using other products…this is part of our research, on the one hand, a search for natural products that meet our standards of quality, which include longevity over time,” he said.
“Our products are not meant to be thrown away.…We try to find materials for tomorrow that will be at the level of Hermès standards,” he added.
When it comes to uncertainly swirling around Brexit, the executive explained that the company took the precaution of stockpiling merchandise in the U.K. in case of disruption at the border.
“We have a prudent approach,” he said.
Touting the company’s geographic balance, Dumas said he is happy with Hermès’ approach in China, which is to focus on adding a presence for the label in a new city each year, opting to emphasize the quality of stores over the amount of them.
“We have continued this strategy, which has been fruitful,” he said, noting it dated back to his time as chief operating officer, a position he took up in 2012, and executives were asking themselves if they should change their tack. The one big change, has been an Internet site, which the company launched on its own, in the fall. Many luxury houses have forged partnerships with platforms like Alibaba’s Luxury Pavilion or JD.com’s Toplife, turning to local experts to navigate the vast market. Dumas said in the fall that the company might be open to considering such a tie-up, given the highly complicated nature of the market, at a later stage.
“We had a lot more sales and traffic, than we had expected…that is very encouraging, too, so I think for the moment we are managing these two distribution channels — digital and new stores in China — well,” he said, noting the clientele is increasingly local.
Hermès plans to open an e-commerce site in Japan at the end of the first half of this year, and elsewhere in Asia in the second half.
In addition to investing in online channels, Hermès is building up production sites, with plans to extend a textile site unveiled recently. The firm counts 42 production sites in France, including 16 dedicated to leather goods, and 12 in other countries: Switzerland, Italy, the U.K., the U.S. and Australia.
Shareholders on Tuesday voted in two new supervisory board members. Estelle Brachlianoff, a French utilities executive, succeeded Sharon MacBeath, who stepped down for personal reasons, and Alexandre Viros, ceo of the French train company travel web site Oui.sncf succeeded Robert Peugeot.