NEW DELHI — As French luxury brand Hermès formally launched its first store in a mall here last week at The Chankya, Eric Festy, the company’s regional managing director for the Middle East and South Asia, said the new store was in line with the growth taking place throughout the region.
“In the first half of the year, we had growth of 14 percent for the Asia-Pacific region excluding Japan, which is an important growth,” he told WWD. “It is an area where there is a huge population — China we have more than 24 stores but there is a lot of potential; Indonesia, where we have just two stores today. There are many places where we can develop — Thailand, India.
While the luxury brand is known for its slow yet steady expansion, the first official opening of an Hermès store in a mall in India is also indicative of the changing retail scene in the country.
When Hermès first opened in The Oberoi, a five-star hotel here, in 2008, luxury brands were available only in the retail areas of major hotels. In 2011, Hermès was one of the first luxury brands to open in a heritage street front building in South Mumbai’s Horniman Circle.
Over the last year, as the Oberoi Hotel shut down for renovation, Hermès had a transitional store in the luxury mall Emporio. The Chanakya, a new mall that is expected to be the leading location for luxury brands in central Delhi, is still not officially open, and Hermès is the only store operating there for now.
The New Delhi store is very different from the Mumbai unit and not just because it is not on the street front, bathed in natural light. Festy explained that in the last six years — since the Mumbai store was opened — a lot has changed in terms of design worldwide.
“First, I think the average size of our stores has changed. Most of our stores are between 200 and 400 square meters [2,150 to 4,300 square feet] now with the exception of some flagships in some countries. What has changed a lot is our capacity to organize the different spaces to display properly our 16 categories including leather, fashion and accessories, equestrian, the watches and jewelry,” he said.
“This store is a good example of what we are doing at the moment, which is to try to find the right balance between transparency and intimacy because our customers and our products require that. It’s not always easy,” he said.
Other regions, like the Middle East, have also seen more of this balancing of concepts. “We already have six stores in the Middle East and don’t plan to open new stores in the near future, but to extend and work with the existing ones. That is a trend at Hermès; today we have more than 300 stores in the world — we don’t plan to open 200 more, but rather prefer to focus on the existing network, to make always more beautiful, more welcoming stores. And we will explore growth in the future in some countries where we’re not present today,” Festy said.
Part of the brand’s global growth has been to ride the changes in each country, some of which have been dramatic in India over the last year. These include a new goods and services tax that took effect July 1 and a sudden demonetization in November 2016, when more than 80 percent of currency notes were withdrawn from the economy.
“I’m not that worried about the goods and service tax because you know it happened in many countries in the world, this change of regulation,” Festy said, explaining that while consumer demand dipped momentarily, the brand continues to look at growth in the long term. “We are a very prudent company. We’re not looking for a very high growth rate, but prefer to have steady development,” he said.