Hermès has long held a special place in luxury-seekers’ eyes as one of the most elite brands from which to own bags and scarves. Its popularity has been no secret—still, in the past decade, sales have popped 226%, taking the brand to new heights.
With that sort of boom, particularly amid a recent slowdown in the luxury industry, it’s hard to think of Hermès as just a dusty old company that’s been around for nearly two centuries.
Instead, it’s best thought of as somewhat of a startup, said Pierre-Alexis Dumas, the French company’s artistic director and sixth-generation Hermès heir.
“I always like to say that Hermès is an old lady with startup issues, because we’ve grown so fast in such a small period,” Dumas said during a CBS News 60 Minutes episode released Sunday. “How can you grow so fast without changing what makes you strong?”
There are several ways in which Hermès is doing things differently than its competitors, such as prioritizing quality over quantity. That’s why, Dumas said, even if Hermès bags come with a price tag of over $10,000, it’s for a justifiable reason.
“Speed is the structuring value of the 20th century,“ he said.
“We went from horse carriages to the internet. Are we going to be so obsessed with speed and immediate satisfaction? Maybe not? Maybe there is another form of relation to the world, which is linked to patience, to taking the time to make things right.”
The Hermès formula is unlike that of its rivals, but it has worked. Its 2014 sales were €4.1 billion, and by 2023, those figures had swelled to €13.4 billion. The company’s shares have risen 22% year to date.
Hermès’s journey has been so spectacular that it’s spawned millionaires among the founding family’s distant relatives. Dumas has been with the French bagmaker for nearly two decades, presiding over the recent growth wave.
Few others have been able to replicate Hermès’s success in maintaining a loyal client base among the affluent while remaining relatively inconspicuous. For instance, the company doesn’t have a marketing department. Yet demand for iconic Hermès bags has consistently outstripped supply—a phenomenon that has unintentionally added to the French company’s allure.
Scaling new heights: Hermès style
A single craftsperson works on a bag, which can take at least five years of training and several hours to make. That automatically creates scarcity as Hermès produces fewer bags than mass-produced brands, which, in turn, pushes prices up.
Some critics have raised issues about the bagmaker creating artificial scarcity. But Dumas pushes back on this idea.
“It makes me smile that this is a diabolical marketing idea. That can only come out of people obsessed with marketing,” he said. “Whatever we have, we put on the shelf, and it goes.”
The company has been looking to train more artisans to help quench a seemingly insatiable thirst for Hermès bags.
Another criticism of Hermès’s model is how shoppers can’t simply walk into a store and expect to buy a Birkin. They must work their way up with a proven purchase history of other Hermès items before they can see their most sought-after bags worth thousands of dollars.
A few shoppers have recently rallied together to sue Hermès for deliberately making it difficult to buy its top-tier products, even if people are willing to pay the money for them.
So far, that case hasn’t yielded consumers any success, as a U.S. judge said during a hearing earlier this year that “Hermès can run its business any way it wants. If it chooses to make five Birkin bags a year and charge a million [for] them, it can do that.”
Despite Hermès’s methodical approach to bag-making, the sixth generation of the founding family has also sought to learn from their ancestors’ mistakes.
“I don’t want to be like my predecessors in the family, that is to say, to die in office,” Axel Dumas, the executive chairman of Hermès, told the Financial Times in September when speaking about succession planning. “The risk is falling in love with what one has made, and not being able to change. At some point, you need fresh eyes.”
Representatives at Hermès didn’t immediately return Fortune’s request for comment.
