BISTRO
Yasemin Pistar
Donald Levy
FASM 430
CONTENTS 3-4
Executive Summary 5-6
Importance within Fashion 7-8
Company Overview 9 - 10
Current Revenue/ Future Outlook 11 - 12
Mission/ Vision Statements 13 - 14 Hermès Story 15-20
Market Analysis Persona One Persona Two 21 - 22
Key Competitors 23 - 24
SWOT
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25 - 32
Introduction to Hermes Bistro Inspiration 33 - 36
Marketing Plan
Promotional Strategies 37 - 44
Mock-Ups
Personal Invitation Menus Magazine 45 - 46
Financial Plan Projection Sales 47 - 48
Time & Action Calendar 49 - 50
Conclusion 51 - 52
Invitation 53 - 54
Sources
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EXECUTIVE SUMMARY
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To create a single branch of a new restaurant owned by Hermès. It will be located at the heart of Paris, France and solely serve authentic French cuisine. Ingredients will be collected from around the world and only premium ingredients will be served. Lunch & dinner is the only meal that will be served, and reservations must be made 30 days prior. If there are no bookings available, customer can then be placed on a waiting list. DÊcor will feature modern Parisian furniture and many elements will be provided by the Hermès house themselves (such as tapestries, tablecloths, hand soap, etc.). There will be a strict formal dress code. There will be a wine cellar containing some of the finest wines and champagnes in the world, while the bar will have a collection of high-end liquor.
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IMPORTANCE IN THE FASHION INDUSTRY
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This brand extension is significant within the fashion industry because both in the industry and among fashion consumers, people have a deep affection towards Hermès and the company’s history.
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COMPANY OVERVIEW
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Established in 1837, by Thierry Hermès, this fashion house is steeped in old history and tradition. Family owned for six generations, Hermès is a fashion house that has become a worldwide symbol of class and wealth. From beginning in saddlery and fine equestrian leather goods, today are best known for their handbags as well as a range of other superior items. Shying away from mass production and outsourcing, it is these very principles that distinguish Hermès from other designer brands. They have certainly come a long way in the last two centuries, Hermès is one of the most prestigious highend brands there is to this day.
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Current Revenue: In millions $
6,636.3
6,170.9
(1,992.2) 4,644.1 (1,970.0)
(1,845.2) 4,325.7 (1,841.8)
(398.1)
(346.5)
2,274.3
2,137.3
58.6 2,332.7
2,137.3
(38.4)
(35.8)
2,294.6 (745.2)
2,101.4 (744.2)
18.4 1,567.6
5.8 1,363.1
(5.5)
(4.7)
1,562.1
1,358.4
•In 2018, Hermès Group reported revenue of $6,814 million dollars, while recurring operating income increased 6% to $2,335 million dollars or 34.3% of sales. •Net profit for the year increased 15% to $1,604 million dollars.
Market Growth: (Revenue in millions $)
2,119
(Revenue in millions $)
1,997
890
838
1,227
1,158
3,209
1,846
830
795
2,377
2,160
1,175
1,105
119
1,021
6,623
6,160
•Revenues in Asia excluding Japan were up 14% driven by strong growth in China and in South Asian countries. •Revenues in Japan improved 8 percent, while sales in America increased 12%. •Sales in Europe excluding France rose 8%, driven in particular by the United Kingdom and Italy, while France posted 6% growth.
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Future Outlook: Hermès continues to show its strength of its business model year after year, with revenue reaching $6 billion in 2018. This performance demonstrates the attractiveness of the collections, based on creativity and outstanding technical expertise, and a model of sustainable and responsible growth engraved in the values of craftsmanship and entrepreneurial spirit. Sales growth is very healthy, since it is mainly based on an increase in volumes. Hermès is proud of its long tradition, drawing excellence of its craftsmanship, a high creativity and an exclusive distribution network that continues to grow. Current Sales: The group’s consolidated revenue amounted to $5,590 million at the end of September 2019, (Third quarter). At the end of September 2019, all the geographical areas also stated an increase in revenue: •Asia excluding Japan (+19%) gained from an outstanding performance in mainland China, and from strong growth in the area, despite the impact of events in Hong Kong. Sales increased in all countries in the area. In China, Hermès opened its 26th store in Xiamen in July, and continued to successfully develop the new commercial platform hermes.cn. The Siam Paragon store reopened in Bangkok. •Japan (+12%) confirmed its sound momentum and benefited from early purchases linked to higher VAT. The Iwataya store in Fukuoka and the Nihombashi store in Tokyo were extended and renovated. •America (+10%) posted strong growth, especially in the United States. •Europe excluding France (+9%) and France (+6%) achieved sound performances, with in particular robust growth in the UK, in Italy and in the Parisian stores.
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Mission For nearly two centuries, Hermès has provided customers wish the finest selection of luxury goods. As we expand our vision, Hermès is proud to add a new project under its name: a French bistro. Just like any other Hermès line, we seek to bring a premium experience to everyday dining. Using exceptional ingredients and creative techniques, Hermès cuisines promise to bring together rare ingredients found around the world and provide customers with an authentic French dining experience.
Vision We aim to make our restaurant and cuisine as sought-after as our goods. We want to make the Hermès bistro a place where people from around the world travel to for the exquisite experience. Ultimately, we want to be held in the highest of regard along with some of the best Michelin Star rated restaurants globally.
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Hermès Story
Identity: •Founded by Thierry Hermès in 1837, the company established its identity through its products. •From beginning in saddlery and fine equestrian leather goods,
today are best known for their handbags as well as a range of other superior items: Men’s & Women’s fashion and accessories, home, baby goods, fragrance, and leather goods. Exclusively sold at 310 stores of theirs. •The brand is also deeply attached to its French identity; Hermès
Paris. The key element of Hermès strategy is that they maintain a large part of their manufacturing in France. Philosophy: “We don’t have a policy of image, we have a policy of product.” -CEO Jean-Louis Dumas (former) •Hermès is deeply entrenched in the platforms of quality &
refinement. The philosophy and aim has always been to remain ‘ultra-premium luxury.’ •Hermès being ranked as the world’s most valuable luxury brand
comes from a combination of rich heritage, exquisite craftsmanship, eye for detail and high levels of quality and professionalism through every aspect. •When a customer buys Hermès, they are buying a piece of history
and tradition. They’re attaining a lifestyle of old European-French elegance.
•This not only creates experiences that engage consumers but creates
memorable moments that connects them emotionally to the brand.
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Creativity: •The exceptional creativity and skills are handed down from generation to generation. • Hermès would not be Hermès without its timeless and iconic
products; the Kelly bag & the Birkin bag.
•It takes two years for an artisan to learn how to work with leather
and six years when it comes to precious leathers. It is very important to Hermès that the artisan must master all of the different stages of fabrication before creating goods for the brand. •One of Hermès core principles is that each bag is made by the
same artisan, from start to finish, which signifies the quality of craftsmanship and uniqueness of its products. Value: •The consumer is purchasing years of premium-quality craftsmanship and reputation of excellence. These are the exact aspects that makes the consumer trust in and willingness to pay that premium price. •They’re investing in these iconic hand-made items because they will
always be of value throughout time. The high retail and resale value are because these pieces are considered artwork. Experience: •Dining at Hermès Bistro will give the same feeling when one purchases a Hermès product. Delivering in terms of presentation in flavorful dishes. •The bistro will be designed to make customers feel like they are
a part of the brand itself; being catered and served to just like an artisan creating a handbag.
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MARKET ANALYSIS
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Target Market: • Mature customers 25+ • Male/Female • Income: High net worth individuals • Status: Upper class. High-end societies/ super luxury
customers • Life Style: Traveler & globally aware • Occupation: Professional, high managerial, administrative • Education: High educated clients Geographic Targets: Tourists from the following... • Asia • Europe • US
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PERSONA ONE
Name: Layla Bojan Age: 47 Location: Los Angeles, California Income: $325 Million Education: Business Administration from UCLA Occupation: Stay-at-home wife; no kids, one dog name Pebbles Lifestyle: •Married to very wealthy Masoud Bajon, who owns a private commercial development company, therefore does not find a need to work. •Being an elite client of the Hermès brand, owning dozens of the iconic Birkin bags alone. •Having their own personal jet. The two travel very often across Europe. Masoud even surprises Layla with spontaneous dinner trips to other cities. •When not traveling or shopping, Stephanie takes a pilates class everyday with her close circle of friends followed by lunch in downtown LA. •Money is no issue.
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PERSONA TWO
Name: Claire Allen Age: 43 Location: Dallas, Texas Income: $1.5 Million (Independent), $5 Million (combined) Education: BA in Science of nursing at Baylor University Medical Center followed by UCLA to receive CRNFA degree Occupation: Certified Registered Nurse First Assistant Achiever Lifestyle: •Claire is married to plastic surgeon, Dr. Mark Allen and together they have one daughter, Sarah & 2 little dogs. •Claire’s husband owns his own practice, in which Claire works at. Together they love their job and both believe giving back is one of the best ways to grow as a human being. •Passions include shopping, yogi enthusiast, food lover & traveler. She also loves spending time with her girlfriends. •Claire is also a fashion enthusiast and loves to go to all the runway event shows. •Claire & Mark make family time a huge priority by taking 14 weeks of vacation every year to travel and splurge to make a great experience. 20
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Key Competitors: Tiffany & Co. Blue Box Cafe, New York Ralph Lauren’s Polo Bar, New York Christian Dior’s Cafe Dior, Seoul Giorgio Armani’s Emporio Armani Caffe, Dubai Burberry’s Thomas’s Cafe, London Comme des Garçons & Dover Street Market’s Rose Bakery, London Gucci’s 1921 Gucci, Shanghai
Exclusivity
Price
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SWOT
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STRENGTH •Strong brand name and global presence; already well established for itself. •Strong management team; ability to combine heritage with innovation, creativities to enter new market. •Markets its products across the world through a network of 300+ stores with wide product offerings.
WEAKNESSES •Intense competition means limited market share growth. •Target market is niche, as it is extremely high priced & aims at the elite class only.
OPPORTUNITES •Attract new customers with this venture. •Possible global expansion if extension succeeds in Paris. •Collaborations with other exclusive brands.
THREATS •Hermès losing its high-profile status if consumers don’t accept new expansion. •Increasing price on raw materials. •Recession and economic instability can affect its global operations; consumers not willing to spend and travel.
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HERMÉS BISTRO INTRODUCTION
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INSPIRATION
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MARKETING PLAN
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Pricing: •Hermès has held its long premium pricing strategy, charging higher than competing brands and their target buyers pay the premium costs as they see the brand as more exclusive. •This strategy will be applied to the new restaurant. •While the ingredients used will naturally hold a higher cost due
to its premium quality, there will also be an upcharge to each menu item to notify restaurant-goers that this is a fine dining experience unlike anywhere else.
Waiting List Strategy: •Strategists at Hermès make good use of the Economic funda ‘Scarcity increases the value’ to create exclusive demand of its products amidst the high-end shoppers by keeping years long waiting list. •Hermès Bistro will keep that strategy by a reservation sign-up
account online via thru Hermès website. Reservations will only be available 30 days in advance. •If the wanted time slot is unavailable, consumers can sign up
for a notification alert if another available time slot opens up.
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Promotional Strategies First Invite: •Hermès will send out private invitations to its highest clientele inviting them for its official first day of opening. •In hopes this will spread by word-of-mouth to other high-status
customers willing to experience Hermès bistro also.
•This will then help gain clientele and get higher sales.
American Express Centurion Card Benefits: •Amex centurion card, known as the black card is one of the most exclusive and highest level of card holders and is invitation only after consumer meets certain criteria. •Black card members will be rewarded 10,000 points by dining at
Hermès bistro when benefit is offered.
Hotel Referral: •Paris’s most exclusive & luxury hotels will give its elite guests referrals to dine at the bistro. •Guest who spend premium prices at hotels are also willing to spend
for high-end dining experiences like this one.
•This will gain more exposure and awareness within continuous
guests who come & go.
Communication: •Hermès does not have a marketing department. However, they do believe in print media. •The brand often promotes them self through luxury magazines such
as Vogue and Harper’s Bazaar.
•With this expansion, Hermès will continue to do print advertising
in Condé Nast Traveler, Food & Wine, Travel & Leisure to communicate with their consumers their on-going story of history.
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PRINT MEDIA MOCK-UPS
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SOCIAL MEDIA MOCK-UPS
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MENU
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FINANCIAL PLAN Projection Sales
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Total a List Total
$3,175,000.00 Hermes Bistro
Cost
Rent YR.
$120,000.00
Occupancy (permits, taxes, insurance, etc.)
$200,000.00
Interior/Exterior Design
$100,000.00
Building Costs (Installations)
$350,000.00
Interiors (dĂŠcor, furniture, lighting, etc.)
$500,000.00
Staff Salaries & Benefits
$220,000.00
Equipment (Security system, POS system, etc.)
$150,000.00
Uniforms
$60,000.00
Kitchen Appliances
$275,000.00
Food Ingridients YR.
$800,000.00
Wine, Liquor, Champagne YR.
$400,000.00
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TIME & ACTION CALENDAR
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CONCLUSION
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In conclusion, my time here at SCAD has taught me the essential skills in initiating, organizing, and executing a well-thought out plan and idea. This extension for Hermès could prove beneficial not only through increased sales, but additionally through widening of their target market while maintaining the brand’s exclusivity. For a consumer who may not be able to get their hands on exclusive Hermès items like the iconic Birkin bag, not because they cannot afford it but because they may not know the right people to get on that waiting list, this bistro will allow them to experience the old and rich tradition that Hermès is known for. Pending the success and public reception of this extension, opening another location remains a possibility in Hermès’ other high-traffic locations.
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PERSONAL INVITATION
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SOURCES
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https://martinroll.com/resources/articles/strategy/hermes-the-strategybehind-the-global-luxury-success/ https://www.hermes.com/us/en/ https://finance.hermes.com/var/finances/storage/original/application/ dcf2ce9c5611a41d221117d5e5da20ab.pdf https://labrador.cld.bz/HERMES-Paris-2018-Registrationdocument/228/#zoom=z https://hypebeast.com/2016/9/fashion-designers-opened-restaurants https://baghunter.com/blogs/insights/hermes-brand-history-timeline https://www.bagsofluxury.com/guides/the-history-of-hermes/ https://www.morningstar.com/news/dow-jones/201909111045/hermesinternational-1st-half-net-profit-revenue-rose https://fashionunited.uk/news/business/hermes-posts-rise-profitsfor-2018/2019032142289 https://www.interiordesign.net/projects/16602-brilliant-hues-set-the-moodfor-jouin-manku-s-voyages-by-alain-ducasse-in-macau-s-morpheus-hotel/ https://www.thechicselection.com/why-are-hermes-bags-so-expensive-andare-they-worth-money https://theconversation.com/hermes-behind-the-scenes-of-the-french-luxurygem-80551 https://www.scmp.com/magazines/style/article/1581182/axel-dumas-ceohermes-says-true-luxury-does-not-always-have-depend https://www.europeanbusinessreview.com/designing-luxury-experience/ https://www.scmp.com/magazines/style/fashion-beauty/article/3004707/howhermes-became-ultimate-status-symbol-fashion-and
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