Hermès - Registration Document 2016

2016 REGISTRATION DOCUMENT

HERMÈS INTERNATIONAL

OVERVIEW OF THE GROUP

ACTIVITY BY SECTOR

1.3.5.2

Art of living

Hermès Art of Living endeavours to be an elegant complement to its

clients’ daily lives, including in their living spaces. Faithful to its culture

and values, Hermès offers a range of unique items in an understated,

resolute style: furniture and lighting, furnishing fabrics and wallpapers,

ornaments and tableware, or personalised creations. Exacting stan-

dards in form, intelligent functionality, and superior materials call on

exceptional skills that combine creativity with precision of gesture.

In 2016, the collections of items, furniture and textiles created under

the auspices of deputy artistic directors Charlotte Macaux-Perelman

and Alexis Fabry were unveiled at the Milan International Furniture Fair,

in a brick pavilion designed by Mexican architects Mauricio Rocha and

Gabriela Carrillo.

The family of office items and curios

Équilibre

d’Hermès

, whose pure

and elementary forms combine leather, maple, wicker and brass, echoes

the tight lines of the

Oria d’Hermès

and

Équis

chairs and table. The new

Sofa

completes the core furniture collection. All of these creations were

received excellently by the press and visitors.

The furnishing fabrics and wallpapers feature imaginary and colourful

urban geometry.

A Walk in the City,

a triptych of decorative panels with

bright colours and structured exuberance, attracted particular attention.

1.3.5.3

Hermès tableware

To celebrate this year’s theme

Nature au galop

, Hermès tableware paid

tribute to naturalist painter Robert Dallet, who worked with Hermès for

twenty-five years, creating many silk scarves. This resulted in

Carnets

d’Équateur

, a new porcelain tableware service designed to reflect the

spirit of a travel journal, where jaguars, macaws, panthers and impalas

frolic surrounded by lush vegetation. The spontaneous sketches and

hyperrealist gouache are the work of Robert Dallet which come to life

and tell a story on theporcelain. Laudedby thepress andquickly adopted

by customers, this service has already proven to be a success.

1.3.6

PERFUMES

In 2016, Perfumes continued their dynamic upward trend, generating

revenue of €262 million, a rise of 9% at constant exchange rates.

The year began with the appointment of Christine Nagel as creative

director perfumer for Hermès Perfumes. Christine Nagel joined Hermès

in 2014 as creative perfumer alongside Jean-Claude Elléna. She was

then made head of creative perfumery and head of Hermès Perfumes

heritage, with Jean-Claude Ellena becoming advisor to the Group mana-

gement of Hermès Perfumes.

The launch of several new products ensured business growth.

In the first half of the year, the Cologne collection set the pace with two

newcolourful creations:

Eaude rhubarbeécarlate

, designedby Christine

Nagel, with its new, compelling and tactile freshness, while

Eau de néroli

doré

, by Jean-Claude Ellena, paid homage to neroli, a component of tra-

ditional Cologne, using it in much higher than usual doses.

For 1May, the Hermessence collection, by Jean-Claude Ellena, revealed

its thirteenth opus:

Muguet Porcelaine

The second half of the year saw the launch of

Galop d’Hermès

, the first

ladies’ fragrance by Christine Nagel, available mainly in Hermès stores.

For this fragrance, which is a tribute to a fiery, free femininity, wilful and

passionate, Christine Nagel imagined a paso doble between leather and

rose, natural materials which are emblematic of fragrance and the world

of Hermès. The stirrup-shaped bottle, pure and airy, a remarkable feat

of ingenuity, echoes the equestrian tradition of the house and its history:

it is a modern new edition of a one-off bottle given in 1930 to guests at

the opening of the New York store, the first Hermès store to open outside

France.

Along with these new launches,

Terre d’Hermès

continued to build on its

status as a classic fragrance for men. Supported by a new advertising

campaign, sales grew by 1.7% in a highly competitive market, with the

fragrance ranking number 3 in France.

1.3.7

WATCHES

With consolidated revenue of €158 million in 2016, Watches division

saw a slight decrease in its revenue (-3%) at constant exchange rates,

despite the retail business remaining mostly stable. This figure does not

include sales as a result of the partnership between Hermès and Apple

of the

Hermès Apple Watch

Sales on the network of external retailers remained more difficult, parti-

cularly in Asia (excluding Japan).

For Hermès, 2016 was the first full year of sales for the

Slim

d’Hermès

, launched at the end of 2015, with new additions to the

range. A new watch, both classic and contemporary, it was acclaimed

by industry specialists as much for the quality of its finish as for the new

aesthetic it introduced. Ultra-minimalist and simple, going against the

tide in a market prone to ostentation, it was also praised for its design

and for Philippe Apeloig’s innovative typography. The

Slim 39.5 mm

has

an extra-flat Hermès calibre, developed in partnership with Vaucher

Manufacture Fleurier, the H1950: this movement makes it one of the

slimmest watches on the market. Since it was launched, five different

models from the line have already been pre-selected for the Grand Prix

de l’Horlogerie de Genève (GPHG) in 2015 and 2016.

2016 also saw success for the

Cape Cod

line, which was significantly

updated and to which new additions were made at the end of the year to

celebrate its 25th anniversary. This iconic line of the house, a “square in

a rectangle” according to its creator Henri d’Origny, reinvents the

Chaîne

d’ancre

motif bracelet, designed by Robert Dumas in 1938. In 1998 the

house launched the twice-round bracelet designed by Martin Margiela.

The models launched at the end of 2016 enable

Cape Cod watch

fans

to discover resolutely new expressions in this line which are both graphic

and escapist.

Finally, in 2016, the success of many of the jewelled pieces in the

Watches division was confirmed: the

Faubourg

Arceau

and

Médor

lines

once again received newexceptional designs, showcasing the combined

expertise of the best artisan watchmakers and jewellers.