Hermès Adds Elegance to the Apple Watch

Apple Watch with the Hermès Double Tour strap

Apple on Wednesday unveiled a new version of the Apple Watch with leathers straps designed and crafted by Hermès. 

It’s a small but important touch as Apple has been selling its smartwatch as a luxury item, competing against Swiss timepieces. I think the only people the Silicon Valley giant convinced of this were some of the leaders of Swiss watch companies. What Hermès provides is a touch of elegance for this consumer electronics product. 

Apple Watch with Hermès Single Tour strap

The Apple Watch Hermès collection consists of the Single Tour, Double Tour and Cuff leather straps designed by the Parisian luxury brand. There are several color and style options. 

The Single Tour with the 38 mm stainless steel case comes in fauve Barenia leather, noir box leather and capucine Swift leather, while the Single Tour with 42 mm stainless steel case comes in fauve Barenia leather and noir box leather. The Double Tour pairs with the 38 mm stainless steel case and is available in fauve Barenia leather and bleu jean, capucine and etain Swift leather. The Cuff pairs with the 42 mm stainless steel case and is available in fauve Barenia leather only.

Apple Watch with Hermès Cuff strap

“Apple and Hermès make very different products, but they reflect the deep appreciation of quality design,” Jonathan Ive, Apple’s chief design officer, said in a statement. “Both companies are motivated by a sincere pursuit of excellence and the desire to create something that is not compromised. Apple Watch Hermès is a true testament to that belief.”

Across the collection, each stainless steel case features an etching of the Hermès signature and includes a customizable face with three exclusive dial designs inspired by Clipper, Cape Cod and Espace Hermès watches.

Hermès strap with four color options for the Apple Watch

“At Hermès, we strive to provide our clients with elegant, creative and functional objects for their everyday lives,” said Pierre-Alexis Dumas, Hermès’ executive vice president in charge of artistic direction. “What more contemporary and relevant expression of this principle could there be than this collaboration with Apple. We are strongly united by the same deeply held ideas and principles. I see it as the establishment of an alliance in excellence.” 

Apple Watch Hermès starts at $1,100 for the 38 mm stainless steel case with the Single Tour, $1,150 for the 42 mm stainless steel case with the Single Tour, $1,250 for the 38 mm stainless steel case with the Double Tour and $1,500 for the 42 mm stainless steel case with the Cuff. The collection will be available at select Apple retail stores, select Hermès stores, specialty stores and department stores beginning October 5.

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Hermès Q3 Sales Up 15.8% Led by Watch and Jewelry Sales

The cream rises to the top as the best luxury goods brands continue to report robust sales in a difficult economic climate.

Hermès reports that revenue in the third quarter increased 15.8 percent, year-over-year, to 683.2 million euros. Revenue rose by 18.2 percent at constant exchange rates (stripping out the effects exchange rate changes). Sales growth for the Group's own stores was up 19.1 percent at constant exchange rates for the period, despite of a high comparison basis.

The 174-year-old Parisian brand said watch sales rose 22.4 percent (24.9 percent at constant exchange rates) to 37.5 million euros. Under the ready-to-wear & fashion accessories category, which includes jewelry, sales rose 28.9 percent (32.4 percent at constant exchange rates) to 148.1 million euros for the period, ended September 30.

Sales in other product categories are as follows:

* Silk & Textiles, up 21 percent (24.1 percent at constant-exchange rates) to 76 million euros.

* Leathergoods & Saddlery, up 8 percent (10.3 percent at constant-exchange rates) to 319.5 million euros.

* Other Hermes Sectors, up 29.9 percent (32.2 percent at constant-exchange rates) to 25.6 million euros.

* Perfumes, up 11.2 percent (11.6 percent at constant-exchange rates) to 42.7 million euros.

* Tableware, up 15 percent (16.8 percent at constant-exchange rates) to 10.9 million euros.

* Other products (which include John Lobb shoes as well as production activities realized for third parties, such as textile printing, perfumes, tanning), up 22.5 percent (23.3 percent in constant exchange rates) to 22.9 million.

Sales among geographical regions are as follows:

* Americas rose 12.9 percent (21.8 percent at constant exchange rates) to 106.6 million euros.

* France rose 5.4 percent to 111.8 million euros.

* The rest of Europe rose 21.3 percent (20.2 percent at constant exchange rates) to 138.1 million euros.

* Japan rose 4.3 percent (3.2 percent at constant exchange rates) to 115.8 million euros.

* The rest of the Asian Pacific rose 28.9 percent (33.9 percent at constant exchange rates) to 201.9 million euros.

Because of its strong third-quarter showing the company increased its outlook for the year, saying it expects sales growth to be 15 to 16 percent at constant exchange rates.

“Meeting this target will be highly contingent on the business sectors' ability to meet stepped-up demand ahead of the year-end holiday season,” the company said.

LVMH Increases Stake in Hermès

LVMH continues to slowly add to its ownership of Hermès International saying it now owns 21.4 percent of the Parisian luxury jewelry house, up from 20.2 percent. Company representatives made the announcement Tuesday during LVMH's half-year earnings report conference call with investors and journalists.

Bernard Arnault

In October 2010, LVMH shocked the luxury and investment industries and enraged the family that owns Hermès by announcing that it bought a 14 percent stake in the firm in a complex derivatives trade that occurred years earlier without public knowledge and resulted in the purchase of the shares at less than half of the market value. Bernard Arnault, LVMH chairman and CEO, said at the time LVMH would continue to buy more shares but did not intend to take control, to make a public offer for the company nor to seek seats on the board.

Two months later LVMH announced that it has increased its holdings on Hermès to 20.2 percent. During this time descendants of Hermès founder Thierry Hermes, who between them hold 73.4 percent of the company's capital, first demanded that LVMH sell its shares then took the unusual step of pooling their shares into a separate holding company. In January, they received the approval of the French stock market regulator to do this. Based on previous statements by the family members in published reports, the new holding company will have more than 50 percent of the capital and have first right of refusal on the remaining shares held directly by the family.

LVMH Becomes the New Big Kid on the Luxury Jewelry Block

Bernard Arnault

For Bernard Arnault, the “King of Luxury,” the acquisition of Bulgari is somewhat unusual. Not because of the type of company being purchased, but because of what he gave up to acquire the Italian luxury jewelry house.

The deal is going to cost Arnault, LVMH chairman and CEO, more than 3.7 billion euros ($5.2 billion), consisting of approximately 1.9 billion euros in shares to the Bulgari family and about 1.84 billion euros in cash to buy out the other shareholders. In addition, the acquisition will dilute Arnault holdings of LVMH to 46.5 percent, while Bulgari will get a 3.5 percent share of the luxury goods conglomerate and become LVMH’s second largest shareholder. Bulgari will get two seats on the LVMH board, the family will continue to control Bulgari and Bulgari’s chief executive, Francesco Trapani, will lead LVMH enlarged watches and jewelry activities, which includes the brands TAG Heuer, Chaumet, Zenith, Hublot, Fred and De Beers. Philippe Pascal.

What does Arnault get in return? In a single swoop of his pen, LVMH’s jewelry and watch holdings will double (from 5 to 10 percent), enabling LVMH to take on its biggest rivals in the “hard luxury” sector, Switzerland’s Richemont, owners of Cartier, and the Swatch Group. He also gets one of the most famous luxury jewelry brands in the world, known for adorning the most glamorous Hollywood stars (including Elizabeth Taylor) and royalty.

Arnault was quoted as saying that hopefully it will show Hermès (a reluctant target of Arnault) that he is able to work with a family-owned company. However, that may be premature as the working relationship hasn’t yet begun.

Both companies say the deal will create a more efficient distribution system for Bulgari (which has been struggling to make a profit in recent years) and help it to expand its network of stores, particularly in high-growth areas such as China.

The stock markets seem to like the deal, as the LVMH price has risen since the merger. Those in the jewelry industry have raised questions on whether it will create a jewelry company that is less distinguishable from other luxury jewelers.

No matter what happens, one thing is certain, the luxury jewelry sector has a new player.

Hermès Wins a Battle Against Possible LVMH Takeover

The French stock market regulator said Thursday that family members who control the majority stake of Hermès can keep control of the company by pooling their shares into a separate holding company and not have to buy outside shares, according to media reports.

This is being interpreted as a victory for the family members of the Parisian luxury house, who own more than 73 percent of company shares, as it battles against a possible takeover of its company by LVMH. The luxury goods conglomerate headed by Bernard Arnault, France’s richest man, stunned Hermès in October by declaring it had acquired 17.1 percent company through complicated stock swaps. LVMH has since increased its stake to 20.2 percent in December. LVMH has said that it would continue to buy more shares as appropriate but it did not seek control of the company and would not make a public offer.

Autorité des Marches Financiers ruled Thursday that the three branches of the family don’t have to make a full bid for the company’s stock, Bloomberg News reports. The AMF granted 31 waivers on mandatory tender offers in 2009, 22 of which were in similar cases, according to the regulator’s annual report for that year, the most recent information available.

Based on previous statements by the family members, the new holding company will have more than 50 percent of the capital and have first right of refusal on the remaining shares held directly by the family, Bloomberg News reports. The family shareholders need a mechanism to allow them to sell without LVMH swooping on the stock, a person familiar with the matter reportedly said.

The decision by AMF was opposed by Colette Neuville (pictured), head of the Association for the Defense of Minority Shareholders (Adam), a minority shareholders lobby group, who said she was shocked and would appeal against it, the Financial Times reports. The story speculates that LVMH, which refused comment, will most likely appeal the decision.