Hermes Group: No Fear Of The Acquisition Of Louis Mohun Group

Hermes is famous for its leather products. The sales of clocks account for only about 6% of the total sales of the products each year, but the business of clocks and watches has gained more and more attention.

"Independent opening of a special watch and jewellery store is a good proof," said Mr. GullaumedeSeynes-Herms, executive vice president of the sixth generation of Hermes family and the global executive vice president of Hermes international group. "Of course, part of the reason is that clocks are relatively different from other products in terms of their specialties."

The tradition of Hermes clocks dates back to 1920s, when Hermes used the technology of making saddles for the first time in the production of leather bracelets.

In 1928, the first Hermes table was presented at the head office 24, Fu Po Avenue, Paris.

At that time, Hermes was working with Switzerland's most prestigious top watch brands, such as Jaeger Le Coulter, Vacheron Constantin and Audemars Pigeut.

In 1978, Bill set up his own watch workshop in Hermes.

In 1998, it expanded the watch department to devote a large amount of resources to the new factory of Hermes clocks.

In 1999, the new tabulating factory was built not far from the original factory, more than 3 times larger than the old one, and became the base of the present Hermes clocks.

Because of its love for the watch business, Hermes also invested in a Swiss long history of high-end machinery and machinery company VaucherManufactureFleurier, with a total investment of 25 million Swiss francs, accounting for 25% of the shares in 2006.

Through investment and cooperation, Hermes has introduced its own watches to the market. These watches are equipped with the mechanical movement specially produced by Vaucher for Hermes.

Gullaume thinks this is an important feature of Hermes watch, which is different from many fashion brand watches.

Indeed, the mechanical movement has always been the soft spot of the big brands to enter the watch market. They often wear the brand's coat, but they have a "heart" from the same machine manufacturing factory.

"More and more fashion brands are involved in Bell watch industry, but most of them are authorized to produce, that is, these brands do not participate in the production of watches. Hermes is different," Gullaume said. "From the beginning of design, research and development, to production and forging, it is done in Hermes's own factory. We produce watches that are truly belonged to the Hermes brand."

Gullaume expects the next two years.

Data show that about 12% of Hermes's sales are from Chinese consumption, and it seems that they have a unique look. Sales of watches and clocks in the Chinese market account for 8% of the total sales of all products, which is higher than the global average.

"With the rapid development of China's economy, there are more and more wealthy people.

These people focus not only on luxury houses, but also on luxury items such as watches and jewellery.

Gullaume thinks this is the reason.

Like all the classic products of Hermes, its timepieces also value design, quality and creativity, and respect traditional manual manufacturing.

On the day of the opening of the first eight hundred new shop, the female craftsmen from the workshop of the leather watch band of the Swiss Hermes watch company, under the spotlight, kept the cowhide strap on pins and pins.

This may be a microcosm of Hermes's ancient craft and modern fashion.

When it comes to the handwork of Hermes, the first thing you would think of is the famous Birkin bag, because there are too many people waiting for it for years.

And from a different perspective, will this affect the sales of Hermes to some extent? "Certainly," Gullaume replied. "This requires trade-offs between product quality and market returns.

Take the Brikin package as an example. Raw materials (crocodile skin) must be kept waiting for several years. We can not go against the laws of nature.

At the same time, it takes time for handwork, and it takes years to train a qualified craftsman. We can't produce an unqualified Birkin bag in a few months for money. "

In fact, not only is the Birkin bag, but also the names of some classic watches of Hermes have long waiting lists.

Nevertheless, Hermes will design and manufacture watches in accordance with the current rhythm. The annual output is not large, about 80 thousand, which is also a reason why its market share is not large.

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The best year, no fear of takeover

Hermes need not worry that the production time of the product is too long and the production volume is too small, which will affect the revenue.

According to Hermes 2010 financial report released in February 3rd this year, the group's total sales in the past year amounted to 2 billion 400 million euros, compared with 1 billion 910 million euros in 2009, an increase of 25.4% over the previous year, far from the expected value of economic analysts. Most of the sales growth in the fourth quarter came from Asia and the Americas.

As for net profit in 2010, Hermes has said that it will exceed 40%, and the specific figures will be in mid March.

In mid January, when Mr. Gullaume received an interview with this magazine, the news had not been announced, but he had shown optimism.

In the case of Hermes, 2010 should be the best year in 10 years (probably the best in History), and its growth rate exceeds 24.2% in 2009. This is seen as a triumph of victory, because Hermes is facing some problems, and the biggest obstacle is Louis's LVMH holdings.

The Hermes group was listed in Paris in 1993, and its share price has increased by about 30 times.

In the second half of last year, the Louis Mohun group bought nearly 15% of the Hermes group through various channels, together with the original convertible derivative instruments, with a total holding volume of nearly 20%, becoming the second largest shareholder of the Hermes group, and said that "depending on the environment and market conditions, it will continue to acquire Hermes shares when necessary."

The industry exclaimed that Hermes will follow Louis's footsteps and become another acquisition target of the Louis Mohun group.

Although Louis Mohun group has made clarification, it still can not keep up with the imagination of the industry, and some even suspect that the financial situation of Hermes has problems.

This time, Hermes released his report card in 2010, which made rumors unheard of.

In the light of

"They are not contradictory," Mr. Gullaume said. "Good products and good operation are complementary to each other.

At present, the global president of the Hermes group is from the family and leaders from all regions, who have injected new vitality into the Hermes family.