New Delhi: Luc Hennard was appointed managing director of Hermes Middle East South Asia Pte Ltd seven months ago, having served the French luxury group for more than a decade. Present in India through a 49:51 joint venture with Ashok and Neelam Khanna who manage Ananda Spa in the Himalayas, Hermes operates two stores in the country that sell bags, scarves, apparel, fragrances, jewellery, watches and tableware, among other products.
Hennard spoke in a phone interview about challenges posed by the Indian market and trends across Asia. Edited excerpts:
How did the luxury market perform in your regions in 2012? Where does India figure?
This part of the world is a challenge, but there is also potential with new markets opening up. We entered India five years ago, starting in Delhi in a hotel like any major brand in the market. Initially, we faced the expected challenges with real estate and imports duties. But today we can say that there is an improvement. After five years, we have taken a step to set up at a stand-alone location at Horniman Circle, Mumbai, and we really believe in the future of this market. We see a nice progression and we feel the following years will be very good for us in India.
The foreign direct investment (FDI) norms for single-brand retail in India have been relaxed. What do you think of this change?
FDI has been challenging in the past. The 30% sourcing locally is not easy for us to manage. Our partners in India are long-time friends of the Hermes family and for the moment we are happy like this. In the future, we will progress depending on the change in the rule, but today we are not considering changing that (i.e. the local India partner).
On the design side, what trends are shaping purchase decisions in South Asia?
More and more, we see fashion accessories progressing and in other South Asian markets, we see a lot of watch and jewellery business. For India, of course, it is our leather and silk products, but as the customers learn more about Hermes, we see more customers buying ready-to-wear, watches and from our home collection.
Is the iconic Birkin in high demand in India as well?
The Birkin bag is popular across the world. It is always in high demand. It is one of the bags we hear about a lot and, therefore, customers want to have one. It is one of the famous leather pieces, but there are a lot of other bags that consumers want.
What are consumers across Asia buying today?
As you know, Hermes has a wide variety of products. We can have a customer come in and buy something like a fragrance or a scarf or a tie, and then also another kind of customer who wants a handbag, or ready-to-wear or maybe an entire tableware set. With so many possibilities, we have every kind of customer.
Hermes was among the first brands to move beyond luxury malls and hotels and to Mumbai’s Horniman Circle creating a high street in India. How has the response been so far?
In order to increase the awareness of Hermes, we needed to be located in a situation that would create an impact. Today, the luxury retail culture in India is not in the streets; it is in hotels and malls. The Mumbai store was a way to show that it was possible to be different, to be directly in the street.
Going forward, what are your plans for the Indian market?
If we look back, we opened a store in New Delhi and then the flagship store in Mumbai. We also opened a small store in Pune, which we eventually closed. Of course, we would like to see more stores opened in India but we want to take the time and be sure about the future. We are open to finding new properties but today we concentrate really on what we can do with the two stores we already have. What we do next is increase the investment in communications in order to share the values of Hermes and continue to develop the market.
What has the brand done differently for the Indian market?
Hermes is a company based on creativity in craftsmanship. India has such a magnificent history of craftsmanship and textiles that as a tribute we looked for a way to match that. Using our experience, we did a rendition of the sari collection that used prints of scarves inspired by Indian designs. This limited edition was our way of showing our appreciation for Indian culture.
Where do you see the Indian market five years from now?
This is a very challenging question. Firstly, we still consider this to be the beginning of Hermes in India even though we entered five years ago. Like I said, it was full of challenges, but we see a very quick evolution of India. This might not mean that in the next 10 years, we will have five shops in the country but right now we are happy with the evolution of the brand and the market. We feel India is an extremely promising market for the future.