Mr. Chavez is the U.S. President and CEO of Hermès, Paris, where has held this position since 2000. Under his direction, Hermès became the premier luxury brand house to lead the revitalization of lower Manhattan, with the opening of a new store on Wall Street in 2007. In February 2010, Robert opened the first ever Hermès Boutique For Men, in New York. He is a graduate of Princeton University and resides in New York.
At The American Express Publish Luxury Summit, Mr. Chavez spoke about what can be learned from the Hermès brand, and what makes Hermès a true Hermès?
The more obvious answers dealt with keeping the company small, having a small supply of products, which helps, but occasionally hinders. He said it can often take eight years to acquire a Birkin or a Kelly bag, mainly because it takes one or two years or more to find the perfect (alligator or some type of leather) skin.
Recently, the less than perfect skins and other materials have been repurposed into products for an ancillary company called Petit h, a capsule collection, that salvages defective merchandise and cutting-floor waste into high-end jewelry and decorative accessories. “These are still one-of-a-kind objects.” Mr. Chavez remarked.
This year alone, sales volume was up 25% from last year at this time. And what does the luxury buyer want? Authenticity, Mr. Chavez said, in large and small details the buyer is looking at what the brand represents and the luxury client can’t be fooled.
One of the most important, if not THE most important aspect of the business is that Hermès is family-owned, and has been for seven generations. In hiring people to work at the sales and at the corporate levels at Hermès, they must become part of the family, share the values and be willing to work in the front and the back offices. Mr. Chavez said that often, if he has time, he likes to be part of the sales staff at Hermès, as he likes to see what customers are buying.
Mr. Chavez founded the first Hermès Men’s Boutique in New York, he saw that in China, the men’s luxury goods dimension of fashion was very lucrative and 45% of Hermès’s business comes from men’s product sales – shoes, belts, ties. And the Asian population has had much to do with this.
So, Hermes began to do iconic pieces – using Hermès well-known symbols: – a Kelly lock, an anchor, equestrian designs — and the customers have responded positively.
Finally, he said, it is good to know that the Aspirational – the first time buyer — has returned – usually buying a scarf, a tie.
“I have seen this before,” he concluded, “and now most especially, the quality and touch of a Hermès product makes their world slow down – this is what a great brand does. It is an authentic, priceless experience.”