Economic Insights

Hermès, the Midas of luxury brands

Thanks to its prestige and the wide domain of their craftsmanship, everything they touch turns into gold.

Throughout history there have been different furtive love stories between major brands, to promote the desire of their wealthier unconditionals and to develop unique products that revalue their brands together and, at the same time, make a good profit out of it; this is called co-branding.

Lolita Lempickajunto with Kenzo are two famous fashion designers who gave, one time, a personal touch to the Nissan Micra and Renault Twingo respectively. Armani took care of the interior of the Mercedes CLK; Dunhill did it for Aston Martin DB 7, and Cartier gave its touch to the famous Lincoln. Even the legendary Bentley went to the watchmaker Breitlingto personalize one of its models. But who has best taken advantage of these moments of unbridled jointly creativity has been Hermès, who since 2008 seems to have acquired a taste for the one-night pairings.

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Citroën 2CV by Hermès

In 1837, Thierry Hermès, saddle, settled in Paris and since then the house has continued to grow and develop. Currently encompasses fourteen crafts: leatherwork and saddlery; male and female silk; men and women fashion; perfumery; stationery; headgear; footwear; glove; enamel; home; table; jewelery and watches. Not surprisingly, thanks to that passion for craftsmanship, and to demonstrate proficiency in these crafts, they’ve expanded their sights to other areas where they felt they could add value, both for the prestige of the brand, and for the excellence of its contributions to such creations.

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Above: «Fortwo Édition Toile H» Smart Car. Below: Bugatti Veyron Fbg par Hermès

In 2008 the legendary French brand developed two actions co-branding in the automotive sector. The first occasion was to celebrate the 60th anniversary of the Citroen 2CV for which they redecorated inside and outside you had the characteristic brown brand handbags. Having a commemorative character, the 2CV just a concept car for Paris Motor Show the same year where he was introduced was produced.

However, on the second occasion it did for the Bugatti Veyron which standard edition then was for sale around 1.5 million euros and the special edition Bugatti Veyron Fbg par Hermes came to rise up to 2.4 million euros, a 60% extra. To celebrate the 10th anniversary model ForTwo, Smart commissioned in 2012 Hermès interior design of 10 models in 10 different colors to be called Hermès «FortwoÉditionToile H» Smart Car and whose price was marked at 38,000 euros for the coupe and 39,500 euros for the cabrio version, compared to the approximately 15,000 euros of a standard Smart ForTwo.

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Leica M9-P Èdition Hermès – Série Limitée Jean-Louis Dumas

2013 was a busy year for Hermès in terms of co-branding projects. Hermès reappeared in the media with a new collaboration, this time at the hands of the German brand of cameras Leica. On this occasion both brands paid tribute to the camera that most contributed to the fame of the German Leica, the model M9-P. From this model they developed two special editions: 300 units of the Leica M9-P Èdition Hermès with a retail price of $ 25,000 and 100 units of the Leica M9-P Èdition Hermès – Série Limitée Jean-Louis Dumas with a retail price of $ 50,000. The standard model ranges between $ 5,000 to $ 6,000.

The same year 2013, Hermès changed of market and reappeared on the scene in a wonderful collaboration with the prestigious brand of watches Jaeger LeCoultre and glassware house Saint-Louis to develop the desktop clock Atmos, which Hermès designed in 1928, 85 years ago.

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Hermès Atmos con Jaeger LeCoultre y Sant Louis

The mechanism of Atmos clock is striking since 1928 for its mode of operation, which is out of the ordinary since it doesn’t need battery power, or wind. It is a clock with an amazing system, air time. A gas mixture, trapped in a hermetically sealed housing, which expands as the temperature rises and contracts when it’s low. 176 units only were produced for this special edition of the desktop Atmos at a tag price of € 30,000 when the prices of their standard Atmos watches are from 5,000 € to 20,000 €.

To end the year, Hermes was called by the South-Korean car brand Hyundai to manufacture what so far is just a concept car that was presented at the Seoul Auto Show: the Hyundai Equus by Hermès. The French brand would contribute with more than 20 components of leather and crocodile skin interior and whose sale price is estimated to reach over 100,000 €. Still no news of their manufacture.

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Hyundai Equus by Hermès

It was the second attempt by the South-Korean brand with a prestigious luxury brand, because in 2008 they tried Prada for their model Genesis, but whose price tag was about $ 78,000 ($ 8,000 more than the V8 standard version) and which the 400 units sold failed to meet the 1,200 that were manufactured.

Finally, Hermes appears in 2015 (shortly after its worldwide scandal by Birkin bag that finally resolved amicably recently as if nothing had happened and reinforced its image as a company committed to animals protection) by the hand of the almighty Apple to take together a special edition of the famous Apple Watch, contributing to the production of two models of handcrafted leather strap distinguished by the characteristic brown color of the French brand.

AppleWatch Hermès edition
AppleWatch Hermès edition

From the base price of a $ 500 Apple Watch we go up to $ 1,500 of the Hermès Edition. A 200% increase in value per watch without adding more technology, but its contribution to a product that is invading all international markets is a simple strap, whose cost we will not even evaluate, and the prestige of the brand. Definitely, I think Hermes knows how to do it very well and those furtive loves make it feel better, for their prestige, and their wallet.

 

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