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Patrick Thomas, CEO of Hermès SA. (Anthony Jenkins for The Globe and Mail)
Patrick Thomas, CEO of Hermès SA. (Anthony Jenkins for The Globe and Mail)

The Lunch

Hermès’ Patrick Thomas: A high-fashion balancing act Add to ...

His first job was with U.S.-based International Telephone & Telegraph in Paris in 1971, where he spent two years and learned a life lesson. “I got so bored that I said, ‘I can’t,’ because it was working in administration – a boring administration – and I didn’t want to work in a boring admin. I wanted to be an entrepreneur in a company where I could develop some talents.”

That’s when he joined family-owned Pernod Ricard, where he stayed for about 16 years before moving on to Hermès in 1989, becoming group managing director while its chairman, the charismatic Jean-Louis Dumas – the uncle of Axel – was in control of product development and artistic style. Design has never been part of Mr. Thomas’s responsibilities.

“I don’t have the talent,” he explains. “You don’t say to [fashion designer] Mr. [Yves] St. Laurent, ‘Please take this skirt from your collection and put in something else.’ It doesn’t work like that. Now, if you think the guy is no good, then you change him.”

He worked closely with Mr. Dumas, but in 1997 got the opportunity to head the high-end division of French-based cosmetics company Lancaster, controlled by the Benckiser family. At Hermès, Mr. Dumas “was only 50-something and I knew I wouldn’t succeed him before a long time,” Mr. Thomas says. Mr. Dumas died in May, 2010.

Lancaster subsequently offered him a promotion in New York, but he declined. He and his wife, who has a farm in France, were rooted in the country. He loves nature – walking in the wild, climbing mountains and bird watching – a lifestyle he saw as clashing with the one in the Big Apple.

“I didn’t want to go to New York – that’s why I said no. But I never left any company on bad terms.”

He moved on to William Grant & Sons Ltd., the first non-family member to take the helm of the liquor group, where he stayed for a few years before returning to Hermès in 2003.

He visited Toronto recently to open the Festival des Métiers, a five-day exhibition that Hermès puts on in various cities around the world to show how its craftsmen make its signature colourful scarves, Birkin bags and other handmade delicacies. It’s the kind of marketing initiative that Mr. Thomas encourages as he shifts spending to these kinds of efforts rather than traditional advertising to reach the 1-per-cent target market more efficiently.

This year, Canada is Hermès’s fastest growing market, he says. Its president, Jennifer Carter, a three-decade-plus company veteran, is Hermès’s longest serving country leader. A wealthy Asian population and tourists helped spur sales at the four Canadian stores, two of them in Holt Renfrew & Co., and an e-commerce site, he says.

Founded in 1837 by French harness maker Thierry Hermès, who produced for royal houses in Europe, Hermès added more product categories to its portfolio over the decades. Grandson Émile-Maurice recruited his friends Louis Renault and Ettore Bugatti to make trunks for cars, furniture and then belts and fashions.

Through marriage, new branches of the family developed with the names Guerrand, Puech and Dumas. But it wasn’t until 1978, when Jean-Louis Dumas was named CEO and creative director that, with the help of two cousins, Hermès got a shot of adrenalin. It relaunched the Kelly handbag and designed another one to British actress Jane Birkin’s specifications. It ran stylish ads, and refurbished stores.

Even during the downturn, when other luxury houses suffered, Hermès continued to post financial gains. Over the seven years to 2012, Hermès’s profit soared almost 200 per cent to more than $1-billion, while revenues jumped 144 per cent to almost $5-billion.

As Mr. Thomas sees it, the world of upscale purveyors is divided into the ostentatious – “bling bling” – and the others, including Hermès, which represent refined quality and the “search for perfection.” Hermès has resisted the temptation to boost profits by having its goods made in China, as other high-end houses do.

“If the family tells me, ‘We want to double the profit,’ I can do it, I don’t need LVMH,” Mr. Thomas says. “Introduce bags with a big H, at $1,500 each, and we will triple the sales and it will be an industrial bag and the sales will go through the roof and the profit will be doubled or tripled and in five years you don’t have Hermès, you have another company. It will be the same name, but the future and quality will have disappeared.”

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