When it comes to business, Patrick Thomas is a family man.
The chief executive of luxury purveyor Hermès SA has held top positions at a series of family dynasties. In each case, he’s been the outsider brought in by the clan to help transform their business, run it better and give talented design officials room to breathe.
He sees himself as an entrepreneur who has a hand in shaping their vision. He leaves the critical design work – such as developing the trademark Hermès silk scarves priced at up to $1,370 a pop – to others.
“If you ask me to design the Hermès scarves, Hermès will go bankrupt,” he says with a smile.
Far from being bankrupt, Hermès of Paris, known for its $8,000 to $50,000 Birkin and Kelly handbags, has enjoyed healthy financial gains despite the uncertainty surrounding the global economy and China, which is still a bastion of big spenders.
As the first non-family member to head Hermès, Mr. Thomas’s success has depended on ultra-wealthy customers who still are ready to drop $170,000 for a diamond-studded leather bag.
By next year, the 66-year-old Mr. Thomas will hand the reins back to a family member – Axel Dumas, 43, part of the sixth generation – leaving at least one key file open. Hermès has been locked in a legal spat with rival luxury powerhouse LVMH Moët Hennessy Louis Vuitton SA over its having bought a minority stake in Hermès in late 2010.
LVMH’s tactic of amassing a large interest in Hermès through complex cash-settled equity swaps, a strategy used by hedge funds to launch hostile takeovers of publicly traded companies without disclosure, angered the usually mild-mannered Mr. Thomas, who led the battle to keep LVMH at bay.
The wrangling seems out of character for Mr. Thomas, who speaks English with a French accent. He displays impeccable politeness and evenness during our almost two-hour late lunch at the appropriately posh Canoe restaurant, on the 54th floor of a downtown Toronto office tower with an unfettered view of Lake Ontario. For someone who deals with the most opulent of merchandise, he comes across as down to earth, calling some of the bejewelled six-figure handbag prices “crazy.”
“I’m not a man of luxury,” he says simply, even as he’s dressed head-to-toe in understated Hermès garb, including the loafers. “I like quality.”
He doesn’t like a fight, but he can fight with the best of them, he says as he dips his spoon in the squash soup, garnished with a dab of sheep’s milk yogurt.
“I’m not a man of conflict,” he asserts. “I’m ready to have a conflict if necessary – I showed it against LVMH, but I’m not creating conflict. On the contrary, I’m trying to create consensus as much as I can. But I can fight from time to time, if necessary.”
That includes ruffling family feathers at Hermès. At one point, he let go two of its members – there are five left in the company now – although he won’t provide details and doesn’t want the matter to be reported. “I said to them, ‘You are not performing, you have to go’… I had to make some difficult family decisions.”
As the outsider, Mr. Thomas aimed to give Hermès more structure and put it on a more daring path. He’s a big believer in family companies that have spawned iconic names such as Saab, Mercedes, Vuitton and Hermès. He feels like a member of the Hermès family, admires it for thinking long term rather than just quarter to quarter, and for taking care of its employees, he says. He hand-picked his successor and, while the family gave him leeway to choose another outsider, he opted for Mr. Dumas, who is “brilliant,” Mr. Thomas says. “He was born in the suit – we say that in French.”
His entrepreneurial and family-business bent is in his blood. He was born in the Burgundy region of France to a family of winemakers; his father went on to develop a fruit juice company. That firm, Pampryl, was acquired by Pernod Ricard, the French spirits concern and one of the companies that Mr. Thomas worked for after he graduated from the prestigious École Supérieure de Commerce de Paris.Report Typo/Error