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Business Analysis & Features

Hermès’ throw away designs

By recycling rejected material from the rest of the group, ‘petit h’ couldn’t be more at odds with its luxury sector rivals, reports Laura Chesters

Nestling among piles of brightly coloured crocodile skins, intriguing sculptures and a display cabinet of curios are piles and piles of white shoe boxes jam-packed with buckles and clasps – all carefully indexed. Pascale Mussard’s workshop is like a haberdashers’ fantasy.

The atelier of her new company – “petit h” – is run out of an annex at her family’s leather-cutting workshop in Pantin on the outskirts of Paris.

But Ms Mussard is the great-great-great-granddaughter of saddle maker and founder Thierry Hermès, meaning her family’s business happens to be one of France’s best-known luxury-goods producers, known for its 6,000 Kelly and Birkin bags and delicate silk scarves.

And her fledging petit h business  – a division of Hermès – is unconventional compared to its peers in the tightly controlled luxury sector.

It creates functional items and art from leftover materials from the rest of the group. Rejected skins, silks, buckles and porcelain have been painstakingly saved and collected by Ms Mussard.  She has a team of 15 to help create these mutant objects.

“We like eccentricity but not just for the sake of it, there has to be a reason,” she says.

Ms Mussard has worked at Hermès for more than 30 years, holding roles including, most recently, co-artistic director.

But with a nickname of “little hoarder” it was only a matter of time before her passion for recycling emerged into a business in its own right.

Ms Mussard’s Aladdin’s cave of items are sourced from across the group’s workshops that include glassmaking business Les Cristalleries de Saint-Louis and its Puiforcat silversmith house.

If a piece doesn’t meet the ridiculously high standards set by quality controls within Hermès, they are snapped up by Ms Mussard’s brigade of “treasure hunters” who will refashion and rework it, mend any imperfections and use it in a whole new way. Her plan might seem common sense, but couldn’t be more at odds with the rest of the luxury-goods world. The desire to control output and quality means usually a brand will weed out even a slightly defective product and destroy surplus or out-of-style items. 

The steady success of Hermès – with operating profit of close to £1bn a year – is in contrast to brands such as Louis Vuitton and Gucci, which have recently been trying to reposition themselves to be more exclusive amid fears they had become too ubiquitous.

Nicola Ko at Ledbury Research said: “Hermes have been successful because they have stayed true to their brand. They have a consistent, global offering, and they haven’t chased sales by producing items laden with logos like some of their rivals.”

But Hermès’s success and its family ownership has also made it vulnerable. In the same year that Ms Mussard launched petit h in 2010, Bernard Arnaud’s LVMH shocked the family when it was revealed it had secretly built a 17 per cent stake in the group (now it’s more than 22 per cent).

The horrified Hermès family issued various alarmed  comments including there is “an intruder in the garden but we don’t want him in the house” and “if you want to seduce a beautiful woman, you don’t start by raping her  from behind.”

The family changed its structure to protect it from future attacks and in July LVMH was fined €8m (£6.6m) by the Paris stock market watchdog for  its tactics.

Ms Mussard agrees the stake building by LVMH was a shock but says it also brought the family closer together.

“We gathered to protect and save the values that are important to the family. We are protecting the family – not just the blood family but all those who have worked here for many years that are also part of our family.”

Things could have been very different. Family feuds have split companies before. The Lacoste family lost control of its company last year when a feud led to its sale to Swiss family-owned group Maus Freres in a deal which valued the French sportswear firm at €1bn. Experts in the sector expect Arnault to sit and wait for a crack to appear, but for now Hermès’s future appears safely in the hands of the family.

Unlike many rivals their expansion has been restrained, although they are currently building two new workshops in Héricourt and Montbéliard to cope with increased demand, and yesterday announced they are more than doubling the size of their London headquarters to create a new megastore.

Ms Ko adds: “Hermès has controlled their expansion – despite being established for over 150 years, they have less stores compared to other luxury brands. Looking at China for example, Hermes has only 26 stores. This compares to Gucci which has 63 and Louis Vuitton which has 49.”

Hermès is in no rush, however. The family pride themselves on their products’ “timeless” appeal and this means looking at the long term.

For Ms Mussard the expansion of petit h will also be slow, with a series of pop-up stores. This month saw the London launch on Bond Street.

She explains: “I do not want to grow this into a big company. If you grow too big you lose something. We have more conversations and can be very creative as a small company. Hermès is a garden and petit h is one of the small flowers within it so it must be cared for.”

Ms Mussard believes the petit h philosophy is a new incarnation of what Hermès has always been good at.

She says: “I wanted to make a statement that passed on the values of the company. I am the oldest of my generation here and one of the few who remembers the two generations before me. I was educated to always take care, to look after things, to finish my bread and to not throw everything away.”

Although petit h is about sustainability it doesn’t mean the products are cheaper than the mainline. Petit h is still using the high-quality produce that the parent company has sourced.

Ms Mussard says: “Petit h is not more or less expensive. This is just another métier  of Hermès.”

It might be just another part of the large brand but petit h is already hot property with collectors. Next month a petit h-designed handbag – being sold second hand at an auction in the US – has an estimate of $100,000 (£61,703).

Further proof then that Arnault’s stake building was a canny move.