I had an extremely sincere, powerful and realistic talk with Laurent Dordet, CEO of the high-end watch brand Hermès. About creativity, reinvention, evolution and the relevance of Swiss-made watches.
Lifetime: I saw the watches for this year and they were both great and unexpected in a way. So at first I just wanted to ask you how Basel is for you this year, for Hermès, in terms of – of course – business, but also in terms of people’s reactions to the new launches.
Laurent Dordet: First of all, Basel for us is an opportunity to reassess who we are in this watchmaking world. First of all, though a lot of people know, not all the people know that we are a Swiss watchmaker, a genuine watchmaker, which means that, unlike several brands most well-known, everything is done in Switzerland, which has to be said – Swiss-made everything, we manufacture everything in Switzerland. And this being since 40 years now, almost, and since 10 years internally, because we integrate, as you know, about everything. And it’s French. It’s French in terms of creation. So this is the first difference. The second difference is even more important. It’s perhaps what I would call the “philosophy of time” that Hermès brings into the market. I would say the attitude towards time, perhaps, is more simple, which comes from the authenticity of the brand. I mean, originally, we were not watchmakers, we are a leather goods manufacturer and we need time to manufacture objects.
So, when you think about that, Hermès is 108 years old, we started in leather more than 100 years ago, and time is only the material we play with to manufacture our objects investing as much time as needed to get the quality we want. And so, as a result, in order to make everything you have seen before this one the relationship with time is not a constraint, is not a stress, it’s a friendly approach. So we like to take our time, we’re not in a hurry, we like to play with time, and not only make beautiful projects, also have a little fun, playfulness, lightness to put into it, we are more than happy, and I think 40 years ago, when we came to watchmaking, that was the first idea: to say we are not there to do serious watches, I mean we are here to get the best quality immediately, which would be simple watches at the beginning, so steel and quartz, but: the best steel, the best glasses, the best finishing, so we were very demanding in terms of quality criteria, but simple technically, so respecting the Swiss know-how. But, on top of that, bringing the crazy fantasy of Hermès in terms of style, and so this was rather a good success at the time. And 10 years ago, when we decided to go one step ahead and keep our entry price watches, but to propose other kind of watches – because integration, because movement, because everything – then we asked what was our way to express mechanical complication, and we’re here to propose our own chronograph, our own Moon phase, our own minute repeater, etc. The answer is we might have some but it’s not the core, the core will be what we’ll have to express more than the others or to express our own fanciness about time. And this was a good thinking because we came to the “time suspended” concept six years ago and this is very emblematic of our way of making things: we make things very seriously in terms of know-how, once again, but having fun doing it and conveying that playfulness to customers. And so there are common points between all our watches, whether they are simple and fancy or more complex and expressing specific complications; the common points are quality, French creativity, and freshness and playfulness. So this is what we develop and what we assess during this fair and I think this message is clearly understood, and many people know us already since a long time, but, yes, the reaction is quite good to this kind of mechanical “hourglass” you’ve seen. It’s a kind of mechanical hourglass emphasizing the last hour before the event, with all the emotion preceding the event and physically visible on the watch as an hourglass. So that’s it. A part of this complication which is a bit top of the iceberg for us. We have a lot of more simple watches for… mainly for women, that are very fancy innovations and have great success really on this fair.
Lifetime: Seeing these watches that you present here in Basel this year, I felt that maybe it’s a decision by Hermès to try to attract the younger customers, and maybe to get more to the lifestyle universe of Hermès. Is it?
LD: We have the same philosophy for all our watches. When I was asked two years ago “Are you going to privilege real watches or fashion watches?”, I answered: “I don’t even understand your question. We are making watches as for every one of our métiers, even bags, we have simple watches, with simple materials, perfect quality, and perfect finishing, but they are simple and enable us to recruit to the brand; and then we provide our customers with a customer path, let’s say, up until higher and higher values, with difference, of course, of materials, of gem settings, movements and complications etc. etc. So, of course, we are more associated in terms of recruitment to women’s fancy products. You know, we are distributed within our own stores externally and internally, we have a lot of people loving the brand, but not mandatorily fan of very complex watches. It depends on the country. And that’s why we include also in our collection – on a small basis, but we include – in Arceau line and in Cape Cod line, which are very famous – since 40 years for Arceau and 25 for Cape Cod – some entry price levels with quartz.
Lifetime: I wasn’t talking about the price, I was talking about the looks which are very nice and a bit younger, if I can say so. I was thinking about the millennials, you know, because this is a very difficult generation to get. They want experiences, they want a state of mind… not really an object. And I was thinking these are perfect for them.
LD: Yes, yes, yes. That’s exactly this one. We want to recruit including younger people and for that having manufacture-movement watches at 4-point-something thousand euros is too much, so we have to have simple, but beautiful watches adapted to this recruitment.
Lifetime: And are you also considering – I’m asking this because I’ve seen all over the fair – everybody’s trying to offer better prices for their watches, in order to somehow respond to the economic reality which is happening in the world. Are you considering such friendly-price strategy?
LD: We’ve always given value for money. So we’ve never increased our prices as much as our beloved competitors when the market was good. We didn’t give up our recruitment segment as many of our competitors did when the times were good. So we don’t have to adapt now, we are still in our recruitment, the prices are fair, we don’t have a problem. That’s it. And I think many customers might be lost by ups and downs, one of the problems in the last three years is that leader prices don’t mean anything in this world, because you go everywhere, in Asia particularly, but you have 30-40% discount like that, on every big brand, and it cost us a lot of sales because we are in our own world, in our stores we are competitive, because people trust the brand etc. Outside, we are the only brand – with Chanel, I guess – not to do discount. So, for sure, we are suffering more in these times than the other brands, but on the long term basis I think we didn’t make a bad choice.
Lifetime: And how important are the métiers for you – métiers d’art – because this year I think I only saw one very nice dial with enamel…
LD: It’s still important for us to do métiers d’art, handcrafted dials, it represents a good part of our sales, I mean about 15% – in value, not in quantity – but we consider it is not Baselworld’s mission to be the way to disclose them, so we disclose just one, but we have a lot of them and we’ll disclose all year long, during events and so on. But we don’t give up, we sell very well, as long as we combine Hermès real creativity coming from scarves, and coming from designs from other métiers frequently and our watchmaking know-how and the know-how of the independent craftsmen we work with – people love it, it’s very exclusive, small series, unique pieces, they love it. Because it’s not only a jaguar, an elephant or a palm tree but it’s part of Hermès patrimony and Hermès design. Hermès is famous for designs, for colours – you may like it or not, that’s another point, but at least it’s coming from somewhere, it’s an artistic point of view.
Lifetime: Which line are you most happy with?
LD: For the men – Slim; for the women, the big hit last year was Cape Cod, that we totally reinvented and relaunched six months ago, with a brand new line, coming back to original; it was the 25th anniversary of Cape Cod – Cape Cod for me is very emblematic of Hermès creation, not only because the style is very recognizable, but also because the way it was created is very emblematic of the simplicity of the maison. There was a motif of the Chaîne d’Ancre (anchor chain) coming from the jewellery of 1938, I guess, and then, in 1991, Jean-Louis Dumas asked Henri d’Origny, who was not a watch designer – as he didn’t want to work with watch designers: “Make me a square watch”. So Henri d’Origny did something which was not square, so he asked him: “What did you do?” and he said: “I didn’t want to do a square watch, it’s not fun, so I put my crazy Chaîne d’Ancre, I divided it in two, I put that… up the square and down the square”. And then, after a few years, it became the Double Tour. Why a Double Tour (Ed. Note: a double-wrap strap)? Why not? So it was a very simple gesture, the Double Tour, Chaîne d’Ancre, square watch – and it became something totally unusual that is today highly recognizable, quite feminine and also very timeless, and its cousin, created at the same time – which is Nantucket, the jewel version of Cape Cod. So we reinvented with a lot of proposals, on different price levels etc., and this time Shadow is kind of a continuation on that, and so the market is figuring out again that this line is incredible and so now it’s booming everywhere, especially in Asia where it had never been successful.
LD: Yes, it was H-Hour. H-Hour was a success in Asia. Because of the logo generation. And so as a second watch there was also an evolution of the logo generation to more sophisticated watches. H-Hour is still there, but Cape Cod is taking the lead. Which is very interesting for us. So… So that’s fine. We are happy.
Lifetime: Just one more question. I remember coming here like ten years ago, when you first started displaying, and the big brands they were like: “Oh, another fashion brand”. And for me these 10 years have been very impressive. As an outsider watching your brand. Very impressive. And I just wanted to ask you: looking back, how would you evaluate these ten years for Hermès in the watch business?
LD: These ten years frankly have been remarkable in terms of technical progress, improvement. I mean, when you think that 10 years ago we were absolutely not integrated, we did not have a single movement, except ETA movement, very basic, one of the first mechanical movement which we… It was marginal. Then, it took us 5 years to develop our own movement with Vaucher with the first movement arriving in 2011, which is… yesterday. I mean, within 6 years we had tremendous awards, recognition etc. from many people. So this was the good part. Then, I think we might have registered a great success.
Now to change the game we have to continue on the same price and probably to revive also the creativity and especially on the women’s side. So the Slim is doing well but it’s very classical, the difference is really subtle in the typography and in the pureness of the line in a world that is very bling-bling. So it’s counter trend but it’s not revolutionary, except for the typography. It’s beautiful. We need attractive pieces also, but on top of that I think we need to astonish also, especially on the women’s side. That’s why we reinvented the Cape Cod line, which was a bit sleepy, and that’s why we are waking up a lot of our present line, that’s why also Slim woman is getting well because it’s really animated. So we did a technical good job, we have to stimulate our creativity and astonishing creativity now. That’s what I try to do with the teams. This is it. Because the same recipe will not work again. We have to get a clear image. That’s why we insist on our “philosophy of time”, because I think it’s the key point in making the difference from other brands, we will not make the difference on technical things, I mean they are better.
Lifetime: That’s not the point…
LD: That’s not a point, that is a given, we must be good, and we will not compete on that. I mean, this has to be a given. We work every year on improving so that it is a given, and we consider we have a lot of proof to make again, it’s not finished for sure and, on top of that, we have to bring this spirit of lightness and fantasy to this market, and don’t forget to be creative and astonishing and a great surprise. That’s important, because people are less addicted to watches than they were ten years ago. That’s it.
Lifetime: Yes, for many reasons…
LD: For many reasons – for the prices that are… for the fact that too many watches are on the market, for the fact that Swiss-made doesn’t mean anything, for the fact that prices don’t mean anything, for the fact that smart watches come etc. etc.
Lifetime: It’s very confusing.
Lifetime: But I think you’ll keep your head together. I’m sure of it. Thank you very much.
LD: Thank you very much for your time