CEO Explains Why Hermes Bags Costs More Than US $100,000

CEO explains why Hermes bags can cost over $125,000

Singapore - Ever wondered how products from luxury house Hermes can command prices of over US$100,000 (S$124,400)?

Every product in the Hermes collection is highly valued due to its craftsmanship, said Hermes CEO Patrick Thomas at the Toronto Hermes exhibition held in October, where individual craftsmen showcased their expertise and explained to visitors how their fashion goods and accessories were made.

Hermes Kelly Bag

Hermes, the high-end label which was founded in 1837, is known around the world for providing the rich and famous with fashion apparel and accessories, especially their famed handbags such as the Birkin and Kelly, which can cost well over US$100,000. They are so valuable as they are limited in stock and according to Thomas, they are also made entirely by hand.

In a video interview by the Canadian Press, Thomas said one craftsman will be in charge of creating that luxurious handbag from beginning to end. It was 'always sort of a miracle', he added, when a bag is created as it takes between 15 to 20 hours to produce one single bag. Even if the bag has been made before, it will be treated as a new project, and be made and later put on the shelf as a 'new baby'.
The reason why a Hermes bag is so valuable, according to Thomas, is due to its cost of labour and its raw materials.

Firstly, the cost of labour is high as the craftsmen put in many hours of work for each product and are required to have highly specialised skills. They have the know-how to create a single product from start to finish, and pay high care and attention to every detail.

Secondly, only the best materials sourced from all over the world are used for each product.
Karen van Hahn, a fashion columnist with the Toronto Star news site, said that 'in this globalised era of quick and dirty manufacturing', Hermes' artisanal practices 'practically belong in a museum'.

Click here to view how Hermes' high-end accessories are made
Each craftsmen in the company follows a rigorous set of rules and standards which has been developed since its founding days as a saddlery in 1837, said van Hahn. They are so proud of their work that they will embed their own signature in the product, thus it is easy to know who created it.

Hermes Canada president Jennifer Carter shared how she got to meet the craftsman who created her mother's Kelly handbag, thanks to late Hermes chairman and CEO Jean-Louis Dumas.

During a dinner at the Faubourg in Paris in 1990, said Carter, Dumas asked if he could have a look at the Kelly bag she was carrying. After inspection, Dumas brought her up the building where an older gentleman was working alongside a younger man.

According to Dumas, the older man was Jean-Luc, who had created the handbag she has carrying, and the younger man was his son, who was learning the trade.

The Hermes Birkin bag alone is touted as one of the world's most highly demanded accessory. According to Business Insider, a Birkin can cost anywhere from US$10,000 to US$150,000, depending on the size and customisation.

Reports online said that the iconic Birkin bag came about when English singer and actress Jane Birkin was sitting next to late Hermes chairman Jean-Louis Dumas on a flight from Paris to London in 1981.

During the flight, the contents from her straw bag came falling onto the deck, much to her embarrassment. To solve Birkin's woes, Dumas suggested he could create a bag which suited her needs. The weekend bag which was made in 1984 was said to be based on an 1892 design.

The Birkin bag was made in such limited quantities that it was almost impossible to procure one, said Business Insider.

It has been seen being toted around by celebrities such as Lady Gaga and Victoria Beckham, said reports online. In 2004, Martha Stewart even appeared in court with a Birkin bag when she was on trial for fraud.

The famed bag was recently featured as the main fashion accessory in Woody Allen's movie 'Blue Jasmine'. Australian actress Cate Blanchett, who portrayed a fallen socialite, was seen carrying the famous Hermes bag throughout the movie, said US magazine Forbes.

Hermes' scarves are also another highly-sought after product in the high-end label's collection line.
To create a Hermes scarf, it takes about one to two years alone to design the pattern, said Hermes CEO Patrick Thomas in a video interview. After, frames are utilised to print the scarf and do the engraving. The whole process can take up to anywhere between 500 to 2,000 hours for one scarf alone, said Thomas. Each scarf also has a hand-rolled hem, added van Hahn.

Jennifer Carter, president of Hermes Canada, said that owning a Hermes product comes with an 'emotional buy-in'. She even knows people who want to be buried in their Hermes blanket.

With such intricate work and detail into the product, 'once the object leaves Hermes, it takes on a life of its own," said Carter.


"You get attached to it and that attachment is like a romance," added Carter.