Drawn to Craft: What the World’s Most Coveted Luxury Brand Can Teach Fashion Today
The landscape of luxury is the one often ruled by ephemeral trends, inflated marketing budgets, and quarterly reinventions, and it is in this landscape that Hermès has emerged, once again, as a silent sovereign. The French Maison just released its first-half 2025 financial report, and, as expected, it reads not like a business update, but a quiet reaffirmation of everything Hermès is and everything other brands might hope to be.
While some fashion houses chase hype and scale, Hermès has committed itself to a subtler mission: protecting craftsmanship, preserving scarcity, and compounding value across generations. The results? Revenue up 8% at constant exchange rates. Recurring operating income up 6%. Net margins north of 31% (excluding France’s recent exceptional tax levy on corporations). And €10.7 billion in net cash reserves — more than the GDP of some countries.
But these numbers, while astonishing, only tell part of the story. The real lesson lies deeper: in how Hermès thinks, how it moves, how it refuses to be swayed. At a time when much of fashion seems caught in a loop of noise and speed, Hermès is moving to its own rhythm — one stitch, one saddle, one silk carré at a time.
The Luxury of Restraint
To understand Hermès is to understand restraint. Not as a limitation, but as a design principle, a financial ethic, and a cultural stance.
While others flood the market with capsules, collabs, and calculated virality, Hermès quietly expanded its store in Florence, reopened its boutiques in Taichung and Macao, and hosted the “Hermès in the Making” exhibition in Shenzhen. These weren’t press stunts — they were tributes to tradition and taste. At Hermès, each decision reflects a long arc. As Axel Dumas, the sixth-generation family leader, has repeatedly emphasised: “We don’t do marketing. We build desire.”
There’s no better illustration of this than their crown jewel: leather goods. The Leather & Saddlery division grew 12.4% in H1 2025, powered not by trend-chasing but by artisanship. New formats like the Faubourg Express and the Médor were introduced, but not massified. Production capacity continues to rise — with new workshops opening through 2028 across Charente, Gironde, Ardennes, and Calvados — but always just enough to meet carefully curated demand. In an age of drops and dilution, Hermès practices deliberate scarcity.
That scarcity is not artificial; it’s rooted in labor. Each bag is made by a single craftsperson. Supply is restricted not to tease consumers, but to respect the time it takes to make something exceptional. It’s not just luxury — it’s discipline.
Geography of Loyalty
Hermès’ success isn’t built on hype cycles or influencer endorsements. It’s built on loyalty, across borders and generations. In the first half of 2025, every single region posted growth. That in itself is rare.
Japan grew 16%, its clientele returning again and again for the quiet dignity of Hermès stores. The Middle East surged by over 17%, suggesting a strong alignment with the region’s evolving taste for minimalist opulence. Europe, both in and out of France, continued to thrive — not just because of tourist flows, but due to the staying power of local clients.
Interestingly, even in Asia ex-Japan — where broader luxury demand has softened — Hermès grew. Not exponentially, but steadily. While other brands face volatility in this region, Hermès’ bet on qualitative distribution, store renovations, and community-based events (like the one in Shenzhen) is paying off. No gimmicks, just grounding.
Our takeaway from this is that Hermès does not pivot. Hermès deepens. Hermès is not surfing waves; Hermès is building underwater structures that can withstand economic, cultural, and political shocks.
Hermès in the Making in Shenzhen. Credit: Hermès
Margin of Mastery
One of the most impressive figures in the H1 report is the operating margin: 41.4%. Let that sink in. For every €100 in revenue, Hermès turns more than €41 into recurring operating income. This isn’t achieved through cost-cutting or outsourcing. Quite the opposite.
Hermès invests heavily in its people. Over 500 new hires this year alone. Over 300 in France, where the group continues to anchor its production. Every employee received a €4500 bonus in February 2025, a gesture that speaks volumes in an industry notorious for underpaying those behind the seams.
Meanwhile, the maison maintains minimal debt, near-zero financial liabilities, and €10+ billion in cash. This war chest is not about hoarding — it’s about ensuring freedom. The freedom to say no. The freedom to stay small in a world addicted to growth. The freedom to remain human in a business being devoured by algorithms.
Brands chase margins. Hermès builds margins.
Silence is a Strategy
In 2025, buzz is cheap. What’s rare is resonance.
Hermès is one of the few brands that can move the culture without making noise. It doesn’t scream luxury — it whispers it, knowing that the right people will hear. There’s no need for celebrity overload or social media saturation. Its storytelling happens inside the objects: the stitch that took ten years to master, the silk pattern inspired by a 19th-century archive, the saddle that still uses equestrian-grade leathers.
The recent performance of its “Other Hermès Sectors” — a 10.3% growth in areas like jewelry and homeware — is further proof. These are not add-ons. They’re extensions of a single creative DNA. Even at Salone del Mobile in Milan, Hermès didn’t dazzle with tech. It humbles with craft.
Other brands may dominate timelines. Hermès dominates memory.
Charlotte Macaux Perelman and Alexis Fabry for Hermès at Milan Design Week 2025. Credit: Sylvie Becquet
A Brand That Thinks in Decades
Fashion, as it exists today, is largely built for quarters. Sales targets. Seasonal relevance. Trend metrics. Hermès thinks in decades.
The upcoming leather hubs set to open through 2028 are not short-term plays — they’re legacy moves. Expanding the watchmaking site in Noirmont is about embedding excellence for 2030, not the next earnings call. Investing in a new Tableware workshop in Couzeix is about generational relevance, not quarterly margins.
This approach isn’t just financially healthy — it’s existentially rare. Hermès is proof that being long-term in a short-term world isn’t naive. It’s revolutionary.
What Fashion Can Learn
The Hermès model may seem unreplicable. After all, how many brands can draw on six generations of family heritage, own their own tanneries, or refuse to advertise? But the lessons are not about copying Hermès — they’re about listening to what makes it timeless.
Lesson 1: Value is not built on visibility.
It’s built on trust, consistency, and the invisible thread of quality. In a world where anyone can go viral, very few can go vital.
Lesson 2: Heritage must be lived, not leveraged.
Hermès doesn’t just cite its archive — it reincarnates it in every product. It doesn’t sell nostalgia; it sells continuity.
Lesson 3: Scale is not the enemy — but it must be earned.
The maison’s leather expansion is a masterclass in patient growth. You don’t scale until you’re sure the soul can stretch with you.
Lesson 4: Craft is strategy.
At Hermès, craft isn’t a department — it’s the whole company. From design to retail to HR, everything flows from an artisanal mindset.
Lesson 5: Profit can have principles.
Paying bonuses. Hiring inclusively. Building in France. These are not CSR checkboxes. They are business fundamentals. Hermès shows that financial performance and social responsibility are not mutually exclusive — they’re mutually reinforcing.
This year, Hermès chose “Drawn to Craft” as its annual theme. It couldn’t be more fitting.
In every sense — economic, aesthetic, ethical — Hermès is drawn to craft not just as a practice, but as a philosophy. At a time when the industry debates AI design, fast production, and virtual storefronts, Hermès stands alone in reminding us of the power of hands, of slowness, of restraint.
The world doesn’t need more fashion. It needs more meaning. And Hermès, as quietly as ever, continues to deliver just that.
“Luxury is that which you can repair.”
By that standard, Hermès is not just the definition of luxury. It’s its keeper.