iW Interviews Luc Perramond

by Michael Thompson

Industry veteran Luc Perramond (left) joined Hermès nearly two years ago after directing H. Stern in Europe and the Middle East and, before that, leading TAG Heuer. While watches are about five percent of overall Hermès sales, Perramond reminds readers that the famed Paris-based luxury firm has been selling Hermès watches since the 1920s. Indeed, the company opened its Swiss office in Bienne in 1978 and built a new three-story production facility there in 1999.
Today about 150 employees at La Montre Hermès assemble the firm’s watches, many of which feature movements from Vaucher, the Fleurier-based high-end caliber maker that also supplies custom calibers to Chopard, Parmigiani Fleurier, Richard Mille and several others.
In 2006, Hermès acquired 25 percent of Vaucher’s capital to secure a supply of high-end movements. Two years ago the firm introduced Grand Hours, a collection featuring the first Hermès caliber. Called H1, the unusual movement, made in collaboration with Vaucher, allows the wearer to accelerate or slow down the display of the hours during the day. At this year’s BaselWorld the firm introduced its first tourbillon, which it placed inside a men’s Cape Cod model.       
International Watch recently sat down with Perramond in New York as he explained his ambitions for the watch division of the company whose orange gift box is among the most coveted by consumers across the globe.

How did Hermès begin in the watch business?
It’s a business that is old for Hermès, and people don’t realize that. Hermès is a family business founded in 1837 by Thierry Hermès and today is a sixth generation business.
We have nine product categories and are a diversified global brand. Tradition, craftsmanship and product design are the values upon which we’ve built the company. We operate 300 stores with watches in every one. Twenty-four are in the United States, and in the watch business we have watch and jewelry retailers too.
We started with watches in the 1920s when Jacqueline Hermès wanted a pocket watch on her wrist. La Montre Hermès started in 1978, which marked the first time in our history a product category was produced outside of France. Jean-Louise Dumas wanted to be close to the know-how in the watch industry and he knew that we needed to be in Switzerland, in Bienne. We have the watch factory there and we also have our own leather strap workshops.

You started at a difficult period for all luxury businesses. Did Hermès also suffer?
I spent a lot of time last year understanding the fundamentals of the business and defining a strategy. Now we are implementing that strategy and it’s a very exciting time for us. The watch division should become a driver for Hermès alongside leather and silk.
Last year, when the watch business was difficult, we had positive growth in our own retailer network, though wholesale markets suffered. We were very lucky to have this extensive network of our own boutiques. 

Do you sell certain pieces only in your own stores?
Until recently no, but that is now a part of our strategy, specifically for certain limited editions, specific products or exceptional pieces that work very well with other products we offer. For example we have the Kelly watches that match with our Kelly bag.
Also the bag colors and the strap colors offer a synergy between product categories. The H-hour, for example, is one of our pillars, and we have a new color in our leather goods. Now we have the ladies watches with the same leather strap colors.

How would you describe Hermès’ watch style?     
We are elegant, discreet and refined. Bling is out, but we have never been bling bling. I think consumers are coming back to refined products, and this is also the reason for our resilience during the crises.
We’re not a mono-product brand. In my experience, if you offer a broad reach of designs, you have a better chance of long-term success. Timelessness means how do you insure you have the ability to sustain interest and business.