"We felt there was a tremendous opportunity to really showcase all these wonderful products for men that Hermès makes," said Robert Chavez, President and CEO of Hermès USA. "These products tended to be overshadowed or almost hidden among the other categories across the street. This store will raise the awareness level of our current and potential male clients in this market who might not have realized before that Hermès had all of these products, from our enamel cuff links to the made-to-measure program."
Despite the tough times affecting other retailers, Paris-based Hermès' customer base includes the super-affluent, many of who have proven to be recession-proof. Indeed, the company recently reported an 8.5% rise in 2009 revenue (11% on an organic basic) attributed to an end-of-the-year increase in sales of its iconic Birkin and Kelly bags. Sales increased by a robust 20% in the Americas, compared to 12% for Asia and 9% in Europe. Revenue for the year rose to EUR1.91 billion from EUR1.76 billion a year ago, outperforming the company's previous target of flat sales. "This is among the best performances posted in the sector," says J.P. Morgan in a research report published this month.
According to Chavez, the Hermès customer is less affected by the recession than the general population, but they are more discerning. "They are not free-spending," he says. "When they do make a purchase, they want something that is more versatile, that will last and endure. Our clients want something that will last them for a long time."
