PARIS — Hermès International is continuing to invest in its domestic manufacturing base to meet growing demand for its products, especially leather goods, which accounted for 50 percent of its business last year, executive chairman Axel Dumas told shareholders at the company’s annual general meeting here Thursday.
“The growth of our leather goods was remarkable [in 2016],” said Dumas. The luxury goods firm inaugurated three new factories, he added, and investment continues in this area. In 2016, Hermès invested 71 million euros, or $78.6 million at average exchange, in its production facilities and securing its supply chain.
The firm plans to inaugurate its new leather workshop in Val de Reuil, in the Normandy region, next week, Dumas said. It is also investing in manufacturing in the Limousin region of central France.
In a context of high unemployment levels in France, especially in rural areas, Hermès took on 590 new employees last year, bringing its total staff numbers to 12,834 at the end of 2016. Some 400 of these positions are based in France, where 61 percent of the firm’s employees work in manufacturing positions. “We will continue to create jobs in order to support our growth,” said Dumas.
Hermès is also promoting manual professions through its charitable entity, the Fondation d’Entreprise Hermès. Last year, it inaugurated the Manufacto initiative in French schools, in which artisans help children to create objects. The project will be rolled out further this year, said Dumas.
“We are determined to bring back manual education,” he said. “The feedback surrounding Manufacto has been way beyond our expectations.”
Silk goods, ready-to-wear and fragrance were also highlighted as standout areas for Hermès in 2016. In the fragrance segment, the company will introduce a new women’s scent, called Twilly, later this year in a bid to create a strong women’s pillar along the lines of its best-selling Terre d’Hermès men’s line.
Digital is another growth area. “We were the first to launch our online store in 2002,” said Dumas. “We are now building a new customer platform. It will be linked to our stores in a way to attract new customers to enter our boutiques.”
The new platform, which has been two years in the making, will be tested in Canada in the coming weeks before rolling out globally. It will combine editorial, sales and service features, Dumas explained.
During the meeting, shareholders elected two new members to the firm’s supervisory board. Dorothée Altmayer, a psychologist and psychotherapist, and Olympia Guerrand, the daughter of the late Hubert Guerrand-Hermès, former vice chairman of Emile Hermès SARL, which represents the Hermès family shareholders, are to join the company’s board, bringing it to parity between male and female members. Sixty-seven percent of Hermès’ French workforce are women.
For the second year running, a representative of animal rights organization PETA, which holds shares in Hermès, questioned the company on its use of exotic animal skins like alligator and ostrich.
“Hermès is a company that respects the rules, notably when it comes to farming. Not only do our practices conform with international regulations, we also try to work with farming unions to makes the standards more demanding in order to improve farming conditions,” Dumas responded, prompting bursts of applause. “Thanks to crocodile farms, this species has been saved from extinction and biodiversity preserved,” he added.
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