Paris, Oct 24 (Reuters) Hermès (HRMS.PA) contemplates potential investments in its existing Italian fashion and shoe subcontractors, revealing plans for deeper supply chain integration. Eric du Halgouet, Hermès’ Executive Vice President Finance, highlighted the possibility of vertical integration to fortify partnerships with suppliers meeting the brand’s high standards, especially in terms of quality.
Elevating Supply Chain Integration
Hermès envisions a strategic move towards vertical integration, considering investments to strengthen ties with select Italian suppliers. The focus remains on consolidating partnerships that align with Hermès’ renowned standards, ensuring a seamless integration of quality into every facet of the brand’s offerings.
Navigating Luxury Partnerships
In the dynamic landscape of luxury, Hermès joins the league of French luxury groups tightening their grip on production. This move echoes a broader industry trend, with players like Kering and LVMH reinforcing specific activities, such as eyewear. In contrast, Italian fashion groups collaborate to safeguard local supply chains, marking a shift from historical independence.
Leveraging Italian Expertise in Fashion
While Hermès predominantly houses its production sites in France, the brand acknowledges the unique expertise of certain Italian suppliers, particularly in shoes and clothing. The potential investments could manifest as minority or majority stakes or the establishment of dedicated sites exclusively for Hermès products, signaling a strategic alignment with Italian craftsmanship.
Future Forward Approach
Assuring stakeholders of the brand’s forward looking approach, Du Halgouet emphasized that Hermès does not foresee any capacity constraints in the coming years. As the brand carefully manages its leather goods production, the integration of workshops in France proceeds at a measured pace, ensuring a sustainable and high quality manufacturing process.
Hermès’ exploration of investments in Italian fashion and shoe suppliers reflects a strategic commitment to excellence. The brand’s pursuit of vertical integration and collaboration with esteemed partners underscores a dedication to elevating the luxury experience. Stay tuned for further developments as Hermès continues to shape the future of high end fashion
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