The company is however pressing ahead with plans for a new store in Chengdu and still aims to open in one new Chinese city every year.
“We are fairly cautious in our development. If you look at the number of stores we have compared to others like Louis Vuitton or Chanel, it’s quite low,” said Dumas. “Of course we’re not idiots: When there is a subsidiary that is over its budget, we pay attention to its costs. But on our strategic budget plans, nothing has changed.”
In France, the company keeps on boosting its network of ateliers employing 7,300 craftspeople. Earlier this month, Dumas was on hand to open the latest leather goods one in Auvergne, central France.
“If this is the only crisis we know, I’m ready to sing for it,” Dumas said. He has already surpassed his “dream” of hitting €10 billion to €11 billion in sales by the time he retires, he noted: Hermes reached €13.4 billion in sales last year.
Succession is never far from his mind. “I don’t want to be like my predecessors in the family, that is to say, to die in office,” he said. “The risk is falling in love with what one has made, and not being able to change. At some point, you need fresh eyes.”
Arnault has placed his five children in operational roles within LVMH. Earlier this year, the 26-year-old grandson of Kering’s billionaire founder Françcis Pinault joined the board of auction house Christie’s.
Hermes’ Dumas too is working on this delicate topic, but details on the preparations and who it might involve are well-guarded secrets. On the new generation of potential leaders he said: “We inform them, we try to be close to them, we put them on some subsidiary boards which gives them the opportunity to learn, and for us to watch how they react,” adding: “I’m pretty confident.”
Dumas, who is the sixth generation in the family to lead Hermes, knows the perils of a rocky succession. His ascension took place as the group was battling LVMH’s takeover efforts under the leadership of the first family outsider, Patrick Thomas, who had succeeded a very ill Jean-Louis Dumas. When the latter died in 2010, no clear successor had yet been named, increasing the group’s vulnerability when Arnault made his move.
Dumas had worked his way up, heading up jewellery then leather goods, the group’s biggest division. He was in the US studying at Harvard when Arnault disclosed his Hermes stake in 2010. Dumas returned to France and became chief operating officer the following year. In 2013 LVMH was fined €8 million by the market watchdog for failing to properly disclose its stakebuilding in Hermes.
This crisis and the company’s rapid expansion have “forced us to structure ourselves,” said Dumas, who recalled the bygone era when the family would sort its affairs at baptisms, weddings and funerals.
“I joined a small company that is now a very large company,” he said, adding, tongue in cheek: “Though I still have time to screw up and make it a small company again!”
Adrienne Klasa © 2024 The Financial Times.
This article originally appeared in The Financial Times.
