And now... back to fashion! :)
Recently we came up with an idea that the most frequent piece of advice given to people by friends, family, books, movies, tv-psychoanalysts, pseudo-psychoanalysts and regular psychoanalysts is: "Stay true to yourself. Don't forget about your purpose. Follow your own path". The same advice is often addressed to fashion-houses. But in that case it usually sounds like: "Go back to your DNA. Go back to your source!". And it's translated like: "Do what you do best". This particular idea became a burden in a brilliant Wall Street Journal article about Hermès fashion-house - The Battle for Hermès by Dana Thomas. Those of you who have spare 30 minutes and English level high enough to understand all the subtleties of corporate top-management, make yourself a cup of tea and read the article. For the rest of you - highlights:
1. Hermès headquarters on Faubourg Saint-Honoré Street in Paris is the best office on Earth (yes! we love the first paragraphs of fashion-themed articles for their complex sentences and extreme picturesqueness).
2. The absolute majority of Hermès goods is produced in France by French craftsmen from raw materials obtained in France or in foreign countries under the direct control of Hermès employees (example from the article - Hermès Brazilian farm producing silk fibres for the company).
3. Financial indicators are at a very high level - sales grew by 25% in 2010.
4. Hermès is a family business. All along its existence it was managed by people with different family names but with the same family tree (cousins, daughters' husbands etc.).
5. Hermès is trying to stand out by calling itself not a fashion-house but a house of craftsmanship with 174-years history and a bunch of traditions (for example, printing of a 90x90 cm silk scarf takes whole 15 hours and the technique is very similar to the one used 74 years ago when the Hermès silk business started).
6. Hermès is at war with LVMH. This war is desperate. LVMH wants to buy Hermès stock and barrel, Hermès resists. One day the family will lose (it's the mood of the article, the family and LVMH) but not in the near future.
So, is it right for Hermès to fight fashion-giant LVMH? Maybe it'll be better to have a deal and make a renovation of family-estate and pay for the education of all descendants?
To answer this question let's use our time machine (yep! that blue box in the corner :) ) and go to January 2011... and let's quote Forbes article "Master of the Brand" by Susan Adams and Hannah Elliott which is about Bernard Arnault: "He's got an energy that's just amazing", "He is battle-hardened from many corporate fights. He has put in place a creative management group that thinks long term", "I see myself as an ambassador of French heritage and French culture", "...as Arnault cultural adviser Jean-Paul Claverie has described it...", "Arnault's role as global arbiter of taste", and last but not least quote by Anna Wintour: "I think he's pretty much unstoppable". The moral of the story: the enemy is strong and will not retreat. He will wait for a money-based conflict between the family-members and then he will be ready to buy the company.
But does this mean that Hermès should wave the white Birkin? Quite the contrary! If the fashion industry turns into a game of chess between Bernard Arnault with his LVMH and François Pinault with his PPR (Pinault-Printemps-Redoute), the fashion itself will at first become a bonus to the enterntainment industry and then will disappear at all (due to strong competition fashion-companies will start to produce everything at the same time). Just those very brands - independent and proud - warm up that melting pot which journalists call fashion. Those brands do not let fashion-giants relax and extend Arnault's work hours. Is it bad? No! The man is full of energy! It's definitely good for him!
That's why we're on Hermès side.
D & P
