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
1
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
3
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. DÊcor will feature modern Parisian furniture and many elements will be provided by the Hermès house themselves. 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 high end 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%, 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.
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HERMÉS STORY
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Identity: •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. Creativity: •The exceptional creativity and skills are handed down from generation to generation. •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. Philosophy: “We don’t have a policy of image, we have a policy of product.” -CEO Jean-Louis Dumas (former) •The philosophy and aim has always been to remain ‘ultra-premium luxury’ from a combination of rich heritage, exquisite craftsmanship, eye for detail and high levels of quality and professionalism through every aspect. Experience: •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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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 commerical development company, therefore does not find a need to work. •Being an elite client of the Hermès brand. •Having their own personal jet. Travel very often. •When not traveling or shopping, Layla 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 recieve 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. •Owning their own practice. Together, they 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.
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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
22
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 315 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 expanison 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 and their target market pay the premium costs. •This strategy will be applied to the new restaurant; 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. •Word-of-mouth will come to play attracting other high-status
customers willing to dine.
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. •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. •This will gain more exposure and awareness within continuous
guests who come & go.
Communication: •The brand 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
39
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MENU
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FINANCIAL PLAN Projection Sales
45
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
51
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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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