Hermès Banks on Luxury Retailing With New Madison Avenue Flagship
NEW YORK — Hermès is making a major statement about the future of brick-and-mortar retail with the long-awaited opening of its massive new Madison Avenue flagship.
After more than eight years of planning, the French fashion house is finally opening the doors to a seven-story, 45,000-square-foot monument to luxury that will undoubtedly change the face of retail on the street. From the outdoor gardens and the cavalier on horseback on the roof to the expansive assortment that includes everything from saddles and dog beds to leather goods, diamond watches, rolling suitcases and ready-to-wear and accessories for men and women, the store joins the Ginza in Tokyo as the largest in the company’s 300-plus-unit fleet.
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Four of the floors, or some 20,250 square feet, are devoted to selling space and a fifth is dedicated exclusively to repairs of Hermès products as well as artisan studios. The two lower levels are offices and stockrooms.
“There is no better tribute to retail,” said Florian Craen, executive vice president of sales and distribution at Hermès International. “Not only does it offer room for all our métiers, but it also offers the opportunity for enchanted discoveries and a place to smile.”
The store, at 706 Madison Avenue on the corner of 63rd Street, encompasses three buildings, one a former bank built in the Federalist style that dates to 1921, and two adjacent town houses that create an L-shape around the bank.
The store was designed by the Parisian architectural firm RDAI that was founded by Rena Dumas, the wife of the former chief executive officer of Hermès. It replaces the two smaller Hermès stores — one for menswear and the other for women’s — that have now been closed.
In the new location, there are two entrances on Madison Avenue. One is for the men’s store, which has been expanded from around 3,000 square feet to more than 6,000 square feet over two floors.
The other offers a preview of some of the highlights from each of the brand’s métiers. So upon entering, shoppers get a taste of the extent of the mix with scarves, jewelry, apparel, leather goods and beauty products all being offered. The main floor also features fragrances and makeup stations.
“As our stores are getting larger, it’s something we pay attention to now,” Craen said. “We’re very careful when we design our stores that there is an expression of all our métiers.”
And in addition to the products, the “extended scope of services” is also being featured with the repair department on the fifth floor that is now the main repair site in the U.S., as well as a concierge, VIP rooms in each department as well as bars.
Throughout the store are more than 150 paintings and pieces of art including a child’s hansom cab from 1830s London on the main floor that pays tribute to both Hermès’ heritage as well as New York City cabs, Craen said. “It’s a house of many stories.”
Some of the features of the former bank building were retained, including a plaque at the rear of the main floor dedicated to the founders of the Bank of New York, including Alexander Hamilton; the original staircase; the grillwork from the former entry to the safe deposit box area, and an antique clock that is still on the wall set to 7:06.
“It’s part of American history,” Craen said.
One of the biggest changes is the significantly expanded men’s store.
“We’re really excited about bringing men’s and women’s together again; they’ve been separate since 2010,” said Robert Chavez, president and CEO of Hermès USA. “That’s going to be a dynamic change for us. The other thing that is new for us are these multiproduct displays so people get a feeling for the extent of the offering that we have.”
In the men’s department, that includes neckwear, shirts, accessories and fragrances in addition to apparel.
The back of the men’s department also showcases some of the brand’s creative offerings such as bicycles, roller skates, skateboards, boxing gloves, dog tents and other novelty items. A selection of saddles is on display here too.
“That’s where we came from,” Craen said, adding that Hermès continues to provide equipment for the best riders in the world.
The second floor is a “men’s universe,” Craen said, showcasing ready-to-wear and footwear along with watches, gloves, bags, fragrances and a made-to-measure salon where customers can create their own suits, shirts, knitwear and other products.
“The breadth of the offering has been significantly expanded,” Chavez said. “We’ve never been able to offer this much before.”
Upon climbing the Portugese limestone staircase to the second floor adjacent to the men’s store is the home area with its assortment of dishes, blankets and furniture.
The third floor is home to a large fine jewelry and watch department. “We’re able to showcase fine jewelry like never before,” Craen said. There is also a large women’s accessories area for gloves, belts, hats and other products as well as the ready-to-wear. “No other Hermès store can present such a diversity of offering.”
The fourth floor is dedicated to leather goods and has a giant glass-fiber bas-relief wall designed from ink drawings by French artist Francois Houtin that feature American trees. A large skylight brings sun and light to the floor. The piece de resistance is a Miranda Brooks-designed roof garden that will be used to host special events and will also be open to clients.
Throughout the store are several seating areas where customers are invited to sit and relax, Craen said. There are wet bars on each floor and butler service for the first time so that shoppers can have coffee, Champagne or other beverages brought to them while they’re resting. There’s a display case on the fourth floor with a collection of leather bags from the 1920s and ‘30s on loan from the archive in Paris.
“We love to see our customers spending time here. The only reason for a store to exist today is to offer special moments that the digital world cannot offer.”
He continued: “Compared to the former stores, there is more space and more interactions with all the seating areas and private rooms.”
Although the artisan studios are currently private, Chavez said the hope is to eventually allow customers to interact with the craftsmen and see them work.
Craen said one of the primary reasons for selecting this location was not only its size but also the “characteristic of the building itself,” with its many windows that allow the light to flow in.
“It’s a very New York feeling that makes it feel more like an apartment.”
Each Hermès store is unique and designed to fit into the community in which it is located. Some are big and others are small. Craen used London as an example, saying it will soon have one of the largest units in the world as well as one of the smallest.
“We’ve always been like this,” he said, “this idea of having very different addresses matching the environment. The network is built on this juxtaposition of small stores and large stores — stores where there’s a lot of traffic and others that allow our clients to have very intimate relation with the brand.”
There are 32 stores in the U.S., Chavez said, which means there is “enormous potential to grow.” Some of the most recent additions include the 7,600-square-foot Austin, Texas, store that is not located in a luxury mall, but on South Congress Avenue, with its lively music and restaurant scene. “It’s a little bit of a renegade, but the response has been phenomenal.”
Other small stores are slated to open in Princeton’s Palmer Square, he said, as well as Aspen, Colorado, and Williamsburg in Brooklyn, New York.
The company no longer has a wholesale business, except for fragrances, but sells exclusively through its own network of stores as well as online. In reporting its first-half figures at the end of July, the company said sales rose 26 percent and the company achieved record operating profits of more than 42 percent for the first time. The gains were driven by strong growth in retail in the U.S. and China and the return of tourists to Europe.
Leather goods continue to represent around half of the brand’s sales and in the U.S., Chavez said, it’s shoes, fine jewelry and home products that are leading the way. “We’re becoming a lifestyle brand now,” he said. “We’re not just known for the scarves and bags anymore. And that’s great to see as we continue to expand our network across the country.”
E-commerce is also a growing business. The category launched in the U.S. in 2002, which Craen said caused “an earthquake in the company,” but it has turned out to be very successful and continues to grow. “Brick-and-mortar came back strong,” Chavez said, “but e-commerce is even stronger.”
And Craen said Hermès’ online presence not only leads to higher sales but also helps with name recognition. “You can find everything we make on hermes.com,” he said. “Our distribution is so limited that we needed to have a door wide open.”
Craen said that despite the challenging macroenvironment, Hermès continues to see “strong growth everywhere.” The goal is to continue to grow the brand in Europe, America and Asia, he said.
“It’s our job to adjust to an unpredictable and fast-moving world. And everything [that] is happening at the very moment was unplanned and couldn’t be foreseen. So we’re adjusting ourselves. We manufacture in France so we don’t have the complexity of supply chains where production is scattered across the world. We are confronted by inflation in France, but I would say we’re in a more manageable situation, because we are in full control of our manufacturing.”
Craen said that while retail may be garnering the most attention of late, Hermès remains first and foremost a manufacturing company. And as a result, it will continue to explore additional products and categories.
“There’s a constant flow of new product coming up so there will be a lot of extension of existing categories for sure in the future,” he said.
