The Secrets to Hermès’s Reign as One of the World’s Most Valuable Companies
It’s not all about the Birkins. Inside the 188-year-old house that has become the most durable brand in luxury—and the most radical.
INSIDE THE MOST exclusive house of luxury, a fashion designer is comparing her work to one of the most stressful jobs on the planet.
We’re sitting in the Hermès offices on the outskirts of Paris in the month before Fashion Week, and Nadège Vanhée, artistic director of the company’s women’s ready-to-wear métier, is explaining her approach to the glamorous job she’s held for more than a decade. I figure she might identify as an artist, or perhaps some word so outrageously French that it comes with an espresso and cigarette. But that’s not how Vanhée describes her role. She thinks of herself as an air-traffic controller.
In her serene office looking down on a courtyard garden, as she sips tea from an Hermès cup and saucer, she interrupts herself to acknowledge that putting clothes on the runway is not exactly the same as navigating chaos in the sky.
“It’s fashion,” Vanhée says. “It’s not making sure that planes are safe.”
But to do the job well requires focus, calm under pressure, attention to detail amid a crush of distractions and making decisions about what’s in front of her while looking over the horizon for what’s ahead. In that sense, her office might as well be a control tower.
I mention this comparison to Pierre-Alexis Dumas, artistic director of the whole company and a sixth-generation member of its ruling family. He’s in charge of the creative process across a house known for its craftsmanship, exquisite technique and savoir faire, the specialized knowledge that has been preserved for centuries—first applied to saddles and harnesses, now to women’s and men’s clothing, ties, scarves, belts, shoes, jewelry, furniture, perfume, makeup, watches, headphones, chess sets, stuffed animals and handbags so coveted they have become an economy unto themselves. At Hermès, there are 16 métiers, from leather goods and equestrian to home and beauty, and their leaders all report to Dumas.
His eyes light up when he learns that one of the company’s stars relates to clearing air traffic.
“My father used to say that if you want to pronounce Hermès correctly, think of a traffic jam in the air,” he says. “Air mess.”
These days, Hermès has soared to a rarefied place in the luxury stratosphere. The business founded in 1837 is a global empire built on leather, silk and cashmere that has become one of the most valuable companies in the world.
Hermès achieved this success by operating unlike the rest of the industry. As conglomerates LVMH and Kering swallow up European brands, Hermès is the rare family-run company that has remained independent. Its signature product is a handbag methodically saddle-stitched by a single person from start to finish. In the age of artificial intelligence, the Dumas family is still betting on artisanship. This strategy of growing through scarcity, not scale, is nothing less than rebellious.
Back in her office, Vanhée reveals that she has been working on something radical herself.
In addition to the ruthless pressure of putting collections on the runway season after season, she is now preparing to relaunch a line of haute couture, which Hermès hasn’t produced since the 1960s. The exalted segment of made-to-order fashion is famously difficult to crack. It comes with specific rules, like mandating at least 20 full-time technical employees. And by getting back into extravagantly customized gowns, which might cost as much as a car, Hermès will be competing with houses like Chanel and Dior in the couture market.
Vanhée says she’s up for the challenge. She points out that some ready-to-wear garments in her recent collections have already introduced couture-like embellishments. While her first collection isn’t coming anytime soon, she gives me a sneak preview of her thought process. She already knows that her couture will reflect the identity of the house, which means there will be plenty of leather and she intends for it to be worn. “It’s not going to be museum pieces,” she promises.
By constantly reinventing itself, Hermès has proven remarkably durable. Over the years, the company has survived wars, recessions, pandemics, cars replacing horses and even a battle with a man known as the wolf in cashmere. When LVMH’s billionaire chairman Bernard Arnault disclosed owning a huge stake in Hermès in 2010, which Hermès viewed as a hostile takeover attempt, his company dwarfed its rival. It still did even after their war ended with a truce in 2014. But this year, Hermès’s market capitalization surpassed LVMH’s for the first time, and it was the most valuable company in luxury—a single brand suddenly worth more than a fortress portfolio of 75 brands.
“It was like an eclipse,” Dumas says. “I could not believe it with my eyes.”
Just like an actual eclipse, it didn’t last very long. But the metric Dumas says he cares about most is not strictly financial. The questions that keep him up at night are the philosophical ones.
“Is what we’re producing desirable?” he says. “Is it meaningful?”
Of course, the more desirable a luxury brand is, the more product it sells. But as it sells more products, any luxury brand risks becoming less desirable. To explain how a 188-year-old company has navigated this paradox—how Hermès has remained so defiantly Hermès—Dumas cites another one. “You have to change all the time,” he says, “to remain the same.”
HEN NAD`EGE VANH´EE got the offer to design for Hermès in 2014, she immediately thought of The Godfather and knew she could not refuse. Vanhée, 47, who grew up in northern France, had studied fashion design in Belgium and kept a low profile as she worked for Maison Martin Margiela, for Céline under Phoebe Philo and then at Mary-Kate and Ashley Olsen’s label, The Row. She wasn’t looking for another job and wasn’t expecting to be courted by a house of luxury, much less the house of luxury: “I never said: One day, Hermès.”
Then, one day, Hermès called. Hermès! She had always revered the brand, even if she was not the most obvious candidate for the job. Yes, she had an Hermès scarf that she’d inherited from her mother and a bracelet her father had given her when she turned 18. But she hadn’t actually bought anything from Hermès before she was hired to work there.
Until that moment, she had felt like an outsider for most of her life. As a child, she was ostracized because of her striking red hair and told she couldn’t wear red clothing. (Today she collects red dresses.) But when she met with Axel Dumas, the chief executive of Hermès and Pierre-Alexis’s cousin, she realized she would be right at home. “He likes the outsider,” she says.
When she started as the creative force behind women’s ready-to-wear, she felt it was vital to understand the psychology of Hermès. She dug through equestrian catalogs in the archives. She soaked up the wisdom of highly trained artisans in the company’s ateliers. In a leather workshop where they work their magic on her garments, there’s a wall of handwritten thank-you notes from Vanhée that accompany the bouquets she sends them after every show. Her investigation into all things Hermès led her to a crucial insight. “Leather is the consciousness of the house,” she says, “and silk is the subconsciousness.”
One thing that surprised her during this education was the house’s very serious commitment to not taking itself too seriously. From skiing penguins on men’s silk ties to the meticulously curated vibe of its retail stores, the brand is less pretentious than playful—even whimsical. (A few years ago, for example, the window display at the company’s flagship store in Paris featured a tasteful pile of horse poop.) That whimsy suited Vanhée, who carries an E.T. charm on her key chain and flaunts a chihuahua sticker from her 6-year-old daughter on the back of her phone.
The more she learned about Hermès, the more she understood that the house’s priorities were the same in every métier, including hers. The nature of fashion might seem antithetical to a brand that stands for timelessness. But her clothing isn’t meant to go out of style by next season. It’s designed to last forever. A collection must be ready to wear now—and decades from now. It needs to honor the company’s heritage without being nostalgic for its history.
“Nostalgia is connected with this idea that it was better before—a certain kind of sadness, a feeling of inadequacy with today,” Vanhée says. “Heritage is about embracing the present.”
To embrace the present, she toys with the company’s past, taking its equestrian roots and twisting them as she recasts silhouettes, repurposes leather and silk and reimagines jackets, vests and Hermès archetypes for women today.
On the day we meet at the company’s design studios in the Parisian suburb of Pantin, where even the trash bins are mottled with horse iconography, Vanhée is dressed in all black. The only Hermès she’s wearing happens to be the first Hermès she bought, a pair of boots designed by Pierre Hardy, creative director for jewelry, shoes and beauty objects, who has been with the company since 1990. Along the way, he learned that creative autonomy inside Hermès comes from the sturdy foundation of a house secure in its identity. “We’re dancing on a platform that is in stone,” he says.
The pirouette into couture will be Vanhée’s latest chance to revive the company’s past—a concept as quintessentially Hermès as its orange box. That morning, she breezes into her studio, past her moodboards and bookshelf with neatly organized binders of fabric, on her way to a meeting with Priscila Alexandre Spring. As the creative director of leather goods, Alexandre Spring is responsible for tweaking iconic handbags like the Birkin and Kelly while coming up with ideas that one day might join them in the canon.
Before the two women get to work, they compare notes on balancing old and new.
“We are very classic with the novelties,” Alexandre Spring says. “We try to be less classic with the classics.”
IERRE-ALEXIS DUMAS works out of an unmarked building on a quiet street in Paris just around the corner from the Hermès flagship store. On a tour of his impeccably decorated office filled with company artifacts, he shows me a baseball signed by Jony Ive, Apple’s former design guru, who worked closely with Hermès on straps for the Apple Watch. Then he opens a cabinet, grabs a hidden box of leather treasures and pulls out a wallet, the first object he made for himself while learning the company’s vaunted saddle-stitch as a child. These days, he signs off on every product that Hermès sells, personally inspecting thousands of designs each year to make sure they meet the company’s exacting standards. “I have to,” he says. “This is the family name.”
That family name has never been more valuable. The peculiar economics of scarcity has created a wildly profitable business. There is so much demand for handmade bags like the Birkin and they are in such limited supply that Hermès clients sometimes wait years before they are invited by a sales associate for the privilege of buying one.
Even so, during our conversation, Dumas reaches for an oddly shaped leather object—the Hermès equivalent of a stress ball. “I’ll tell you what is stressful, but it’s good stress,” he says. “It’s thinking about Hermès.”
Nobody has thought more about Hermès than Dumas, 59, who traces the history of women’s clothing at the company back to its founder. When Thierry Hermès opened his first workshop, his harnesses were known for two things. “They were extremely discreet,” Dumas says, “and they revealed the natural beauty of the horse.” In the early days, Hermès dressed clients with four legs. But those principles apply to Vanhée’s clothing, which is meant to be understated, flattering and emboldening.
The famous origin story of women’s ready-to-wear at the company involves a female customer declaring that her horse was better-dressed than she was. Et voilà—Hermès began dressing humans, too. Dumas tells me another version that stars his great-grandfather, Émile Hermès, whose four children (all daughters) inspired a women’s line in the 1920s. Either way, the first official women’s ready-to-wear collection wasn’t presented until the 1960s. In the 1970s, Pierre-Alexis’s father took over from his grandfather and set about diversifying the family business. And in the 1990s and 2000s, the fashion division got a makeover when a series of subversive creative directors, like Martin Margiela and Jean Paul Gaultier, rebranded Hermès “from horsey to hip,” as one fashion critic put it.
But as the line evolved, the company went looking for someone who could make horsey hip—that is, an Hermès designer, rather than a designer for Hermès.
At other houses, creative directors transcend their brands. But at Hermès, the house is bigger than any of its inhabitants. “It’s through our work that we elevate ourselves,” Dumas says. “Joining Hermès is deciding to serve something greater than yourself, accepting that, and then very joyfully sharing that success.”
Vanhée’s métier is successful in more ways than one. It opens a door for shoppers to enter the universe of Hermès, which makes it essential strategically. It’s also important financially. The ready-to-wear and accessories division accounted for 22% of the company’s sales when she started and accounts for 29% today, making it one of the fastest-growing parts of the business. But to Dumas, what really matters is that Vanhée’s work resonates creatively. “She absorbed what Hermès is about,” he says. “She picked up the dream of Émile Hermès and brought it much further.”
While creative directors bounce around, the ones anointed by Hermès tend to stick around. When Véronique Nichanian recently stepped down as the company’s head of menswear, it was after a reign of 37 years. Vanhée might have that sort of longevity.
At this point, she has done the job longer than any of the men who came before her. “It’s really something that I hope I can do for a long time without boring anyone,” Vanhée says. She also has the confidence to do it in her own way. As fashion designers overshare on Instagram to cultivate their personal brands, she looks at social media but never posts. “It’s not my job,” Vanhée says. As it turns out, a tastemaker does not have to be an influencer. She has the luxury of expressing herself through her work for Hermès.
“I profit from the great sympathy of Hermès,” she says. “You say Hermès, and some people will say, Can I get 20% off? And all the others say, Oh, my God—Hermès.”
THIS HAS NOT BEEN a particularly luxurious year for the luxury industry, which has been dealing with the uncertainty of tariffs, softening global demand and the constant threat of forgeries and cheap knockoffs—which for Hermès includes the Wirkin, a Birkin dupe from Walmart. Meanwhile, a dizzying game of musical chairs left more than a dozen houses scrambling to hire new creative directors this season.
The turbulence hasn’t shaken Hermès. This palace of opulence continues to seduce new generations of shoppers while Very Important Clients keep splurging on crocodile Birkins. Last year, Hermès reported a record $15.8 billion in sales, and the company’s market cap typically floats between $250 billion and $300 billion. That means Hermès brings in less annual revenue than Mercedes-Benz, Target, Adidas, Ford, Delta Airlines or Michelin individually, but it’s worth more than all of those companies put together.
As we discuss the company’s resilience, Dumas brings the conversation back to his touchstones.
“What does it mean to be desirable today?” he says. “The true meaning of desire is not instant gratification. The true meaning of desire is to find something that gives meaning to your life.”
Dumas believes the quest for meaning will be the guiding force of the modern age. When consumers buy something, he says, they want to know where it’s made, how it’s made, who made it—the human craft behind the product. “That’s what Nadège does. That’s what all the people who work at Hermès have understood,” he says. “They’re working on helping us be in touch with ourselves.”
All of which explains why he looks offended when I ask if he’s using AI. I might as well have asked if he spent August at the office.
“No,” he says. “Why?”
Does he think a machine could saddle-stitch a handbag like the ones made by Hermès artisans?
“Never.”
Why?
“It’s all about the human touch. Yes, you can program a machine. But what the machine doesn’t have is feelings. It doesn’t have consciousness. It’s not aware of what it’s doing. It’s just doing what it’s supposed to do.”
But if a machine could do everything humans can, would he use it?
He doesn’t need an Hermès stress ball to think about this question. For all the changes in his family’s business, the answer has always been the same.
“You’re talking to someone working for a company with over 7,000 craftsmen,” Dumas says. “No. I would not do it. Over my dead body.”
