Hermes: From Horse Harnesses to a Company Worth 200 Billion Dollars

For the first time in history, the market value of Hermes has officially surpassed 200 billion euros. The French fashion house is now ranked eighth among the most valuable according to the STOXX Europe 600 index, surpassing Swiss Novartis. Furthermore, Hermes has become the second most valuable luxury brand, and although its value is exceptional, it is unlikely to surpass the LVMH group anytime soon. This luxury giant is valued at 420 billion euros, and its owner, Bernard Arnault, is according to the latest Forbes list, the richest man on the planet. Hermes was founded back in 1837 when Thierry Hermes, inheriting his father’s craft, opened the Hermes house in Paris, selling horse harnesses and bridles to wealthy Europeans. Due to its high-quality craftsmanship, Hermes won a number of prestigious awards at the time, thus becoming known to customers outside the French metropolis.

After his death, his son Charles-Emile took over the business and moved it to another location, 24 Rue du Faubourg Saint-Honore, where it remains today.

Insistence on Quality

The new owner expanded production, hired skilled craftsmen who made high-quality saddles, and later riding bags for the European, Russian, Asian, and American elite. Around 1914, the heir to the Hermes business, Emile-Maurice, began working for the Russian Tsar, but also for the first time put a zipper on leather products, further expanding the assortment. With the development of the automotive industry, the demand for their horse and carriage equipment significantly decreased, so they decided to produce – women’s handbags, as well as clothing. The rest is history.

Namely, the handbags quickly conquered the American market, as well as famous American women who were considered style icons. Due to Jackie Kennedy, fashionistas wanted to wear Hermes silk scarves, and after a photograph of Grace Kelly covering her pregnant belly with their handbag was published in Life magazine, the company was flooded with inquiries – everyone wanted to buy the ‘Kelly’ handbag. At that time, French painter Alfred de Dreux painted their famous logo, and the brand began using recognizable orange boxes.

In the 1980s, specifically in 1981, the craze for Birkin bags began, which Hermes created for the icon of French chic, Jane Birkin. Besides being the most expensive bags in the world, with prices that can exceed several hundred thousand dollars, they are also known as a fashion accessory with the longest waiting list. For some models, the wait was even six years!

Hermes has come a long way from horse harnesses and bridles and has become one of the few brands whose quality has not changed for centuries. Perhaps the secret lies in the fact that the company is still in the hands of the heirs of Thierry Hermes, who, by insisting on quality and skillful marketing, have managed to create a brand worth 200 billion dollars.