Hermes: Crafting Success in the World of Luxury Fashion

Hermes: Crafting Success in the World of Luxury Fashion | The Enterprise World


We all dream of owning those popular luxury items, especially from the fashion capitals like Milan, New York, and Paris, where the most reputed fashion brands come from. Every brand has an inspirational story. Have you ever thought about the story behind these brands? The stories of their origin, the cities they came from? 

When we talk about luxury, heritage, craftsmanship, and stylishness in ultra-luxury leather and silk products, there’s one name that easily comes to our mind – Hermes. In this article, we will get to know the story of this unique luxury brand.

Let’s go through the deep story of the brand, from selling Haut à Courroies (saddle bags) to Hermès Birkin. In short, let’s discuss the origin, history, marketing strategies, and market presence of the brand.

History of Hermes: 

Hermes: Crafting Success in the World of Luxury Fashion | The Enterprise World

Challenges Faced By Hermes:

  1. Continuous takeover interest from LVMH: The brand has faced persistent takeover interest from rival LVMH, which quietly acquired a 17% stake between 2002 and 2010. This led to a legal dispute, resulting in LVMH selling down its stake. The brand defends its independence through a private holding company with the first right of rejection for family share sales, preventing LVMH takeover. In 2011, over 50 Hermès successors formed a co-operative named H51, holding 50.2% of shares and assuring not to sell it for two decades. Two family members outside the cooperative also resisted LVMH, ensuring that the brand operates independently.
  1. Succeeding in China: The brand is taking a careful and creative approach to enter into China’s luxury market. Despite being in China since 1997, they have opened only one store each year since 2015. They plan to make each store a special experience, highlighting craftsmanship and connecting with China’s traditions. This is different from the developing shopping culture in Asia. In 2012, they also launched Shang Xia, a Chinese luxury brand that focuses on Chinese craftsmanship. The company keeps its brand exclusive by avoiding flashy displays, logos, and celebrity advertisements that are suitable with the government’s restriction on excessive displays of wealth. However, whether this strategy works depends on how Chinese consumers view luxury Products.
  1. Strengthening the Hermes brand equity beyond leather and silk: The brand is known for its luxury leather and silk products and is working on strengthening its brand in other categories. For example, its watchmaking division, La Montre Hermès, has a 90-year history but only contributed 3% to the brand’s total revenue in 2019. The newly appointed CEO sees potential for qualitative growth but admits it will be a slow journey to establish the watchmaking division. Similarly, other categories like perfumes and jewelry are growing in sales, but they haven’t reached the success levels of the leather and saddlery products division. They aim to build stronger brand equity beyond its traditional strengths in leather and silk.

Top 5 Competitors of Hermes:

Hermes: Crafting Success in the World of Luxury Fashion | The Enterprise World
  1. Chanel: It is a private company owned by the Wertheimer family and the headquarters of the company is located in London. The brand specializes in women’s ready-to-wear clothes, luxury products, and other accessories.
  1. Christian Dior: The brand was established in 1946 and controlled and chaired by French businessman Bernard Arnault, The brand is famous for perfumes and cosmetics, watches and jewellery, and fashion and leather goods. 
  1. Burberry: The brand was established in 1856 by Thomas Burberry, and the headquarters of the brand is located in London. The brand designs and distributes ready-to-wear garments including trench coats, leather accessories, and footwear. 
  1. Ralph Lauren.: The brand was established by Ralph Lauren an American fashion designer in 1967 and the headquarters of the company is located in New York. The company produces products ranging from the mid-range to the luxury segments.
  1. Prada: It is a luxury Fashion brand established in 1913 in Milan by Mario Prada. It is famous for its leather handbags, travel accessories, shoes, ready-to-wear garments, and other accessories 

Marketing strategies of Hermes: 

Hermes: Crafting Success in the World of Luxury Fashion | The Enterprise World
  1. Preserve the brand identity as a luxury brand while adapting to market trends and customer’s needs.
  1. Various marketing strategies like branding with its classic luxurious products, advertisements, campaigns, and collaborations.
  1. The brand targets high-net-worth individuals who appreciate the quality of luxury goods
  1. The brand used social media to show its products, stores, and collaborations.
  1. The brand has also collaborated with Apple to create a limited edition Apple watch for their customers.
  1. The brand’s exclusive products help to maintain the brand’s position as a symbol of luxury.

Well-known marketing campaigns of Hermes:

Market Value of Hermes: As of January 2024, the brand holds a market capitalization of $211.87 billion, ranking as the 49th most valuable company globally. In 2022, it made a worldwide total revenue of approximately 11.6 billion euros and a growth of over 20% compared to the previous year.

Hermes: Crafting Success in the World of Luxury Fashion | The Enterprise World


1. What is the Hermes brand best known for? 

Ans: The brand is famous for its exclusive handbags.

2. What is the price of a Kelly bag?

Ans: The Iconic Kelly bag comes in various sizes whereas Kelly 20cm would cost around $8,250.

3. What are the most popular Hermes bags in 2023?

Ans: Hermès Birkin 30 en Desordre was the most popular bag in 2023.

4. What is the cheapest Hermes-Paris bag type?

Ans: Aline Bag is the cheapest item worth $1,925.

5. Are Hermes-Paris bags an investment? 

Ans:  It is the best option if you are looking for the highest ROI on luxury goods. 

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