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Hermès CEO On the Future of Luxury

The evolution of an institution and how luxury brands are changing with the times

For our next AFAR Conversations, which takes place on January 13, we’ll be talking about the trends that are shaping the way we experience luxury, be it on our travels, or on our smartphones, or in boutiques. Panelist Robert Chavez, president and CEO of Hermès U.S.A. and Latin America, talks about how the 180-year-old brand is evolving with the times—and reveals the destination he’s obsessing over now. 

Tell us about the origin of Hermès.

CHAVEZ: We started in Paris in 1837 as harness makers, so we always like to say our first client was a horse. We still have our equestrian offerings, but the company has clearly evolved over the years into other categories, from bags and luggage to ready-to-wear, silk scarves, ties, watches, and more. We will obviously change as the world changes, but we believe in staying focused on what we do best, which is to make high-quality handcrafted products.

What preoccupies you most about the evolution of the brand?

C: We need to recruit the next generation of clients, and all the things we do should somehow be related to that effort. And when I talk about the next generation of clients, it’s not just the younger generation I’m referring to. We want to introduce the house to anyone who wasn’t familiar with Hermès before.

Robert Chaves, CEO of Hermès USA and Latin America

 How is Hermès attracting this new generation of clients?

C: Apple Watch Hermès is a great example of a product that brought new customers into the boutique, but it also portrayed Hermès as being innovative and tech-savvy. We also opened a perfumery in downtown Manhattan last September, and that’s a great way to introduce people to Hermès at a lower price point. In terms of the boutique experience, we’re not so much about opening new stores. We’re focused on enhancing the existing boutiques we have, expanding their size and product offerings, and creating a lifestyle experience. We’re also completely relaunching our e-commerce platform next summer because it’s a key way for us to reach and grow our audience.

What are the challenges today for luxury brands?

C: One of the challenges everyone is facing is traffic into traditional brick-and-mortar stores, thanks to the ease of shopping online and on our phones. Nobody needs to go to a store anymore to buy something, so you need to make the in-store experience special. When someone does come into a boutique, they want to experience our products and hear stories about them. Here in the U.S., we invite our designers to join us for in-store events with our customers. If you own a scarf, and the artist who designed it is telling you the inspiration behind it, the scarf means that much more to you, and there’s a stronger emotional connection there.

Which brands do you admire for their ability to innovate and reach new clients?

C: The first one that comes to mind is Starbucks and its new 15,000-square-foot Roastery concept, which I experienced recently when I was in Seattle. To me, it’s just genius: it’s all about an experience that makes you want to spend time there. You want to go in and sit and have your coffee there, and you want to go back for lunch, and if you’re interested, you can learn about the roasting process and the sourcing of beans. I love how Starbucks is always pushing the envelope; they’re not just resting on their laurels because they have stores all over the world. They’re always looking for the next thing. To me that’s really exciting. Apple is certainly another company to watch, especially with what Tim Cook is doing to bring people in from the luxury world.

Let’s talk about travel. What gets you excited about a new place?

C: I have this theory about travel that the more steps it takes to get to your destination, the more rewarding it’s going to be. If you can fly directly to a place, that’s fine too, but sometimes those cumbersome extra steps that take you off the beaten path—a small propeller plane, a helicopter, a boat—are what make a place more interesting and desirable.

What destination do you have your sights on next?
C: The place that I’m obsessed about is Antarctica. I want to see it before it’s totally taken over. Because of the melting ice, all these countries are now positioning themselves to take advantage of the rich mineral deposits there, and it’s in danger of becoming a gigantic mine. Hopefully it will never get to that point. It’s also a challenge to get there, and depending on the time of year you go, the water can be rough when you cross the strait. But these are the chances you take with exciting travel, and it’s absolutely well worth it.

>>Next: This Is the Secret to Enjoying the Amalfi Coast