HERMES PONDERS WEB, PREPARES FOR OPENINGS

Byline: Katherine Weisman

PARIS — Hermes International is close to a decision on how it will attack e-commerce, but its chairman told shareholders Monday that any online presence will be geared to selling merchandise and overseen directly by the company.
Jean-Louis Dumas, chairman of Hermes, said at the company’s annual meeting, “If we go online, it will be to sell, and not just through some little gallery. And, if we do, it will be on our own.”
Dumas told the audience at Unesco’s assembly hall that the company is “actively reflecting” on the Internet issue and that an internal task force would be presenting its conclusions to management “in a few days.”
Hermes publishes 300,000 editions of the Le Monde d’Hermes magazine twice yearly, a good source for content and audience, Dumas noted. Some Hermes products may not be suited for online sale, specifically goods that customers like to touch, such as a Kelly Bag, he cautioned, “but fragrances, watches, or agendas could be very good for electronic sales.”
A more immediate priority for Hermes is its new New York store, scheduled to open in early July, with an inaugural party set for Sept. 20. Located at Madison Avenue and 63rd Street, the unit represents an investment of $27.6 million. Dollar figures have been converted from the French franc at current exchange.
“We have enjoyed 57th Street, where we have been for the past 15 years, but the street has changed, what with the arrival of Nike and a movie studio store,” Dumas said. “Plus, we needed more space. And we couldn’t exactly ask Mr. Arnault or Chanel to share.”
On the other side of the U.S., the Hermes shop that opened last year at the Bellagio hotel in Las Vegas has met with immediate success, he said: “You cannot imagine the amount of traffic. It’s just masses of Americans.”
At the meeting, Dumas highlighted various developments last year as well as plans going forward. These ranged from the opening of a Milan flagship last June — Hermes’ second largest European store after the Paris flagship — to work under way in Tokyo for the 11-story Maison d’Hermes on the Ginza, set for a 2001 opening.
He also touched on a new technique developed to make crocodile skin both matte and extremely supple.
As previously reported, Hermes net profits in 1999 soared 33 percent to $106.8 million on sales of nearly $835.6 million, up 21 percent over 1998.
While the fashion world is impatient to hear what plans are in store for Jean Paul Gaultier, a company in which Hermes took a 35 percent stake for $20.5 million last October, Dumas was typically discreet.
“We have very easy, agreeable relations with this company that enjoys very strong management,” Dumas said, reiterating how Hermes will help Gaultier widen distribution through store openings. No time frame was indicated.
He was pleased to boast about the amount of fashion editorial Gaultier generated for Hermes in the 20th Anniversary edition of Madame Figaro, which hit newsstands last weekend. Gaultier organized a shoot called the Waltz of Ages, which opened with a baby in a swing made from Hermes scarves and shawls. Other items scattered on Gaultier’s six pages included a red crocodile Kelly bag and gold link Hermes bracelets.
Sales for all but one of Hermes product groups were up last year. For silk scarves, one of Hermes’ signature products, sales were down 4 percent last year to $87.3 million. “People just haven’t been wearing scarves like they used to,” Dumas said, noting that now he senses a change. “The fact that Christian Dior used printed silk scarves in their latest fashion show has helped put the taste back. We feel very good vibrations.”
He noted that gains in other areas more than compensated for the scarf shortfall. While Dumas did not make his comparison product-specific, it is well known that watches and leather goods fall into this category.
Last year, Hermes watches enjoyed a 20 percent sales gain to $79.7 million while leather goods sales rose 35 percent to $232.9 million.
Sales of Hermes ready-to-wear rose 19 percent, as previously reported, to $117.8 million. The gain was felt in both women’s and men’s apparel, and Dumas rallied behind the designers of both lines, Martin Margiela and Veronique Nichanian, respectively.
“The fashion press could not imagine that Hermes would ask Margiela to design our women’s wear. But he has a strong sense of elegance, which he expresses differently in his own collections. For us, he shows a very fine sense of detail, down to the threads of buttons, which are sewn in the shape of an H,” Dumas said.