Louis Vuitton vs. Hermes: A Case Study

Luis Vuitton vs. Hermes Case StudyCase Study

As we think of authentic luxury brands, Louis Vuitton and Hermès may come to mind as some of the most sought-after fashion Maisons.

By understanding how these companies compare, we can gain a better understanding of the luxury industry and its challenges and opportunities.

Let’s start out with Louis Vuitton.

Who and What is Louis Vuitton?

On August 4, 1821, in a small hamlet located in the eastern mountains of France, Louis Vuitton was born. He was the iconic founder of the Louis Vuitton brand of leather goods now owned by the conglomerate LVMH. In the early years of his career, he had been appointed as trunk-maker to Empress Eugénie de Montijo, wife of Napoleon III. The year was 1854. Louis Vuitton had dreams of inventing a fashion house that would change the face of accessories and luxury fashion forever. Although his quest to create trunks is what kicked off his career, Louis Vuitton created a niche in the women’s accessories market. Very soon, competitors imitated the style and design of the Louis Vuitton bags.

After the death of Louis Vuitton in 1892, his son George Vuitton took on a huge role as he worked diligently to convert the company into a worldwide luxury brand. The brand launched its iconic monogram symbol pattern In 1896, which was successfully patented to prevent worldwide counterfeiting.

As time went on, the Louis Vuitton building was created in 1913, located at Champs-Elysees in Paris, France. 

In the following years brand also expanded its reach across the world with stores in New York, Washington, Bombay, London, Buenos Aires, and Alexandria.

Fast forward many years and in 1987 Louis Vuitton, Moet & Chandon, and Hennessy came together to form the luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton SE which is better known as LVMH.

Louis Vuitton now has more than 460 stores worldwide and operates in 50 countries selling fashion goods, especially high-quality women’s bags, worldwide.

Why is Louis Vuitton so Successful?

Quality

Quality has been at the core of every single Louis Vuitton product since day one This strategy proves to be very successful amongst consumers. Louis Vuitton is constantly creating new products that are exceptional in both their design and their craftsmanship; it is because of this that they do not need to do much marketing if any at all. Each Louis Vuitton bag is specially handcrafted and the authenticity of the brand ranks very highly in values that consumers look for such as a unique design, social currency, and style. Despite being a global luxury brand, Louis Vuitton has done a wonderful job of maintaining personal relationships with their market which makes the community seem much smaller than it actually is.

Innovation

Innovation is essential to Louis Vuitton. Louis Vuitton has been and still is successful because it adapts to the needs of its customers and continues to invent itself. The introduction and creation of new designs while staying true to their classic traditions resonate with their consumers. The brand has also worked with various designers and artists including Jeff Koons, Takashi Murakami, and Pharrell Williams who have had the privilege to create their own limited-edition lines. Through numerous collaborations, the brand has an outlet to connect to new and younger generations.

Exclusivity

The third secret to the success of the Louis Vuitton brand is its exclusivity. Determined to counter mass production with short-term limited edition series, Louis Vuitton has solely built the team, brand, and clientele with the attractiveness of select, chic, products.

To stand out in the public eye means being different. This means that not everyone will own the same bags, and means that those who do, get exclusive products. This sense of scarcity increases the desirability of these products as purchase waitlists become longer.

All in all, the combination of quality, innovation, and exclusivity have made Louis Vuitton the successful brand we all know today. 

Next, let’s move on to Hermès.

Who and What is Hermès?

Hermès is a French luxury goods manufacturer that was established in 1837 by Thierry Hermès. The brand specializes in leather goods, lifestyle accessories, home furnishings, perfumery, jewelry, watches, and ready-to-wear.

Its logo, since the 1950s, is of a horse-drawn carriage because the original intent of the Hermès brand was to serve the needs of European noblemen by offering bridles, saddles, and other leather riding gear.

The name comes from Hermes, an Olympian deity in ancient Greek religion and mythology. Hermes is considered the herald of the gods. He is also considered the protector of human heralds, travelers, thieves, merchants, and orators.

Thierry’s son Charles-Émile Hermès moved the company’s shop to 24 Rue Du Faubourg Saint-Honore in Paris, in the early 20th century and it still remains there to this day as the company headquarters. Famous all around the globe, Hermès has and continues to attract consumers each season with their luxury products as well as their limited edition accessories.

The Expansion of Hermès

Hermès entered the United States by originally offering their products in the Neiman Marcus department store in New York in 1930. The company’s iconic horse-drawn carriage logo and signature orange boxes were not introduced until the 1950s so the company strived to create a name for itself through quality and differentiation.

Later on, Hermes created a watch subsidiary La Montre Hermès in Bienne, Switzerland in the 1970s.

After the company took up Puiforcat, Saint Louis, and Perigord as tableware manufacturers in the 1980s, Hermès was able to consolidate its position in rapidly growing segments of the luxury market. Today, the brand operates 311 stores globally across the U.S., Russia, and Asia and has over 15,000 employees.

With revenues of over USD 8.3 billion and profits of over USD 1.8 billion as of 2019, Hermès is one of the largest and most admired luxury brands in the world.

Hermès Birkin Bag

The world-known “Birkin bag” was first introduced in 1984 when actress and singer Jane Birkin said she needed a medium-sized bag. Today, a Birkin bag costs between USD 12,000 to USD 300,000.

Hermès is able to price their products in this range because of the delicate, detailed handwork that goes into each piece. Each bag takes between 18 to 25 hours to complete using only hands to make it. If the bag is made of the more delicate crocodile skin, the time is lengthier.

Why is Hermès so Successful?

Hermès’ success can be summarized by a single sentence quote from former CEO Jean-Louis Dumas – “We don’t have a policy of image, we have a policy of product”. Multiple generations of the Hermès family have held ownership, management, and leadership of the company. It is because of this that the principles of the Hermès brand have never changed.

Quality

Hermès products are made almost entirely in French workshops (Ateliers Hermès), which have a strong emphasis on quality. Hermès prides itself on the strong principle of “patience” which has allowed the team to achieve the highest quality in their products.

In addition, Hermès invests time and resources into the training of all new employees and artisans. The ones who have been carefully selected to work with Hermès go through a three-day in-house training session called “Inside the Orange Box” that ties the newer generations of the company back to its roots.

This strategy has proved to be very successful as training helps make each Hermès employee involved and makes them a part of the philosophy, values, and company.

Exclusivity

Hermès is not easily accessible, as Hermès is considered “ultra-premium luxury”.

Customers know that when they walk into a Hermès store, they will not walk out with a Birkin bag the same day. For one to receive a Birkin bag a customer needs to place an order with an expected wait time of a few months before the bag is in their possession.

Authenticity

The limited availability, as well as the price points for Hermès products, makes the brand attractive to very affluent customers. As Hermès follows a global product offering approach, the same product collections are to be sold everywhere in the world, despite diverse regional preferences.

In conclusion, it is the quality, exclusivity, and authenticity that makes Hermès so successful. Each of these factors contributes to the demonstration of the company’s dedication to its brand and legacy.

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Louis Vuitton vs. Hermes: A Case Study In this post we're comparing two of the most iconic and prestigious brands in fashion: Luis Vuitton and Hermes. Enjoy!
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