Laurent Dordet appeared remarkably relaxed for a man running a luxury watch retail business during a pandemic. “The year was crazy,” the chief executive of Hermès Horloger, the French luxury house’s watch division, said in a recent video interview. “But not bad at all.”
In February, Hermès published its 2020 results. Despite a three-month period during which, according to Mr. Dordet, its watch factory was either closed or running at 50 percent capacity, the watch division reported revenue growth of 2 percent, for a total of 195.9 million euros (about $231 million). A fourth-quarter spike of 28 percent year over year, driven by recovery in Asian markets, meant the division reported an overall increase for the fourth consecutive year.
Hermès is known first as a maker of leather goods, ready-to-wear and accessories, but according to Morgan Stanley’s 2020 watch report, published in March, it’s also one of the top 25 Swiss watch companies by turnover and increased its market share to 1 percent last year.
Hermès Horloger’s performance was a rare high point for Swiss watchmaking last year (the division is based in the Swiss town of Brügg rather than Paris, where the business has been headquartered since its founding in 1837). According to the Federation of the Swiss Watch Industry, exports of Swiss watches in 2020 were down 21.8 percent by value over 2019.
Mr. Dordet said there was a clear explanation for the Hermès results: “It’s simple — we postponed most of our launches until the autumn last year. We are retail oriented. As long as stores were closed, it would have been stupid to send them goods they couldn’t sell.”
But as retail opened up in China and around Asia last fall, the brand’s partners there sold watches from existing collections that Hermès had continued to deliver during 2020. “As long as you are convinced that sellout is the only religion, you have to postpone,” he said.
Mr. Dordet also has rebalanced the business’s distribution away from airports and retail destinations reliant on tourism. “As a consequence,” he said, “since August, we’ve had the months of our lives.”
Postponing delivery of new lines meant delaying the introduction of Hermès’ new sports watch collection, called H08. The initial model, in different metals and straps, was meant to debut 12 months ago, but was bumped to April 7, the opening day of the Watches and Wonders online fair. Hermès is one of the event’s 38 participating brands.
As for the watch’s name, “The figure 0, nothing, and 8, infinite,” Mr. Dordet said. “That’s where the idea of the name came from.”
Hermès is not known for high-performance sports watches. “The idea was to create a sports watch in spirit but not necessarily in performance,” said Philippe Delhotal, the division’s creative director. “Sport at Hermès is not about sweating, it’s about elegance and enjoying a lifestyle.”
The H08 has a custom shape — roughly square, with rounded corners that flow into integrated lugs — and original typography that follows the lines of the case, both created under Mr. Delhotal’s direction.
“There’s a logic running through the watch,” he said. “The case, the dial, the typography — everything is articulated by the geometry of the underlying form. It was not influenced by an existing shape. We started from scratch.”
“We wanted a recognizable shape, but a unique shape, one you won’t find anywhere else on the market,” he said. “This isn’t easy to do.”
The H08 took three years to develop, according to Mr. Delhotal, and measures 39 millimeter in diameter, the same as many popular sports watches, such as the Rolex Explorer. He said the titanium, ceramic and graphene composite case options were chosen for their lightness and ergonomics.
Despite the current popularity of steel sports watches, there is no steel option and no leather strap either, and, said Mr. Delhotal, no plan to create a smaller version. Each model is powered by the Hermès H1837 automatic movement, produced by its movement partner Vaucher, in which it has a 25 percent stake. Prices start at $5,475, for the titanium model.
Mr. Dordet said that creating special typography has been an Hermès signature that began with the slender italic typeface on the Arceau, the house’s first modern-era watch, created in 1978 by its long-serving artistic director Henri d’Origny.
Mr. Dordet said Hermès Horloger produces around 50,000 watches a year and approximately 20 percent of its customers were male — but, even though the H08 was aimed at men, he wasn’t particularly concerned with the brand’s customer balance. “The mix is not my point,” he said. “I don’t care really. I would rather sell 10 percent more watches.”
Oliver Müller, founder of the Swiss-based watch consulting firm LuxeConsult and contributor to the Morgan Stanley report, said Hermès’s performance during the pandemic was cause for optimism. “The market will recover pretty fast for the brands with strong distribution in Asia and the U.S.A.,” he said in an email. “Hermès is very much one of the luxury brands that benefits from the search of ‘blue chips’ values sought after by clients in times of uncertainty. I would forecast a reasonable growth given the fact that in 2020 when the market lost more than 20 percent, it came out flat.”
According to Mr. Dordet, delays caused by the pandemic will allow the H08 to be immediately available. If it had been presented in 2020, as planned, “we wouldn’t have delivered in April,” he said. “We were targeting June or July. Now, for once, everything will be ready in all the markets at the same time. We should do it every time, but we don’t.”
He said he wanted this pattern to be the norm in the future. “The pandemic has helped in that way,” he said. “Now, if I cannot ensure that a watch presented at Geneva will be on the market before June, I won’t launch. We will postpone by one year.”
All this, said Mr. Dordet, is part of a bigger ambition. “My ultimate goal is to have Hermès as the first choice and not the fifth” of watch buyers, he said. “Let’s face it, up to now, we sell more watches to Hermès lovers than to watch lovers.”