Las Vegas Weekly

January 14, 2010 · 6:35 PM

Hermes’ flagship store opens in Crystals at CityCenter tomorrow

By Robin Leach

Hermes USA President and CEO Robert Chavez in Hermes at CityCenter.

Photo: TVT

For two centuries, the name Hermes has stood for the world’s finest leather goods. In fact, the French company started out making leather saddles, whips and harnesses. Today, it’s a giant retail operation -- and a family business in its sixth generation -- across the world with 28 stores in America and 200 overseas outlets.

It’s a big brand name that has counted Ingrid Bergman, Humphrey Bogart, Lauren Bacall, Marlene Dietrich, the Duke and Duchess of Windsor, Monaco Princess Grace Kelly, President Kennedy and Jackie Onassis as customers.

Some say its extraordinary success is thanks in part to the U.S. invention of the zipper. From saddles, Hermes had to meet demand for travel accessories and baggage with the advent of the automobile. And in 1920, when the zipper was invented, leather goods and bags became de rigueur.

Hermes began its invasion of Las Vegas with its first store in the Bellagio in 1998, and then expanded a year ago with a second store at the Wynn and Encore’s shopping passage. Tomorrow, it opens its flagship store, the third on the Strip, at Crystals in CityCenter.

I chatted with Hermes USA President and CEO Robert Chavez this week as we toured the 4,500 square feet of enduring craftsmanship and timeless Parisian style.

Robin Leach: Has it all turned out the way you wanted it?

Robert Chavez: Here in Las Vegas, yes, yes, even better than I expected. We opened in Las Vegas in 1998, and we have done very nice business for many, many years. We are very cautious about our distribution. We try to keep it very limited. When we opened a second store in Las Vegas, we were a little nervous, thinking, OK, surely it is going to take away some of the business at Bellagio, but the overall picture will end up being a positive one. As time went on and the year went on and things started to get better, by fall season our business in both stores was really thriving. So not only did we have a very successful year at Encore, we had a very successful year at Bellagio. We actually had growth at the Bellagio boutique.

RL: So do you have the same thoughts now that you’re opening a CityCenter flagship store?

RC: Yes, we still have the same conservative outlook. … Yes, everything I read and hear about says business is down and times are tough, but when you come here, you still see that there are more people here than pretty much anywhere else, any other city we’re in. There is a tremendous amount of traffic, and people come to Las Vegas to have a good time. And they love to shop in Las Vegas.

RL: Does this new store now become the flagship?

RC: This will probably become the flagship because of its size. It’ll be the largest in Las Vegas and also I think because of the location here at CityCenter. I had only seen CityCenter on paper and in sketches, and I have to tell you that I am really impressed. I think it’s a dynamic project. Everything isn’t open yet, but with what is open and with just having a look and vision of imagining what it is going to be like when everything is open, it is just an incredible project. I love the shopping venue. I love the hotels. I think the architecture and the details are just so striking. When you look at these architectural details and you look at the restaurants that are in here, these are incredible dining experiences. There is already a lot of excitement, with more to come.

RL: How is the top end of the business at the moment that you cater to, the rich and famous I used to talk about on my TV show? Do you still cater to the top quarter percent of the 1 percent?

RC: Yes. I have to tell you that that segment of the business has been very good. It was impacted a little bit at the end of 2008 and a little bit in the first quarter of 2009. When I say impacted, I mean that maybe people didn’t feel as free about purchasing things that they would like to purchase. And there was a little bit of maybe I shouldn’t be spending money on things right now when things are so tough for so many other people. But the real high-end customer did continue to shop, because they were still looking for things of value and quality and really enduring products.

By June, we started to see a little bit of an uptick in a broader segment, not just the high end, and by the fall season, it really was back in a significant way. This holiday season was very, very strong. It all speaks to the quality and uniqueness of Hermes.

RL: Tell me about the product and what you are bringing here from “the legend of Paris.” What will be new that you will have here that you haven’t shown before in the Southwest?

RC: What is unique about Hermes is that every one of our store directors goes to Paris twice a year to do their own buys. They buy for their store. So our store director here for CityCenter has been in Paris already and will be going again at the end of this month. He will select the entire assortment of merchandise and products for CityCenter. No two boutiques will ever have the same exact assortment, and that goes for Bellagio and Encore. All three are different!

When a store director goes, they may see a beautiful alligator skin and say, well, instead of doing it in black, which a lot of people maybe in New York or San Francisco might want black, he is going to do it in a vibrant red or a great orange color, just to give it something really unique and special only to CityCenter. That’s just one example of all the products, from the coloration of silk scarves to the design of the scarves, which he chooses, to ties to red carpet wear collection, even to shoes.

What that does is, the Hermes client really knows now that regardless of where they are traveling, if they are in Beverly Hills or CityCenter or Palm Beach, if they see something in the boutique that they really like, they know that they better buy it because they may not find it when they go back to their city or even in Paris.

RL: Is a lot of this custom and individualized? Is there something that will always be in every one of your 200-plus stores?

RC: Probably. I mean you will always find scarves and ties. You will always find the bestselling colors. If it’s a navy blue or an orange or red. Generally, you are going to find that, but when you get beyond that, you are going to find more preppie, vibrant colors in Palm Beach and find probably a little bit more subdued colors in a Boston market, for example. And of course you will always find a saddle in every Hermes boutique, wherever you go in the world. Saddles still sell very well -- even in Vegas. The U.S. market is the largest saddle market for Hermes.

RL: Is it good for Hermes to be butting heads against Chanel and all these other star brand names in Crystals?

RC: Yes, because it just attracts more people. It attracts a broader audience for us. Maybe somebody that doesn’t really know us, they know Dior or Chanel. They know Chanel through the cosmetics. But if they see Hermes, they’ll wander in because they are in this big shopping area. It’s great exposure for us.

RL: Are you the only guys in the retail business using the color orange?

RC: In terms of packaging, yes, I think we are the only ones. It became orange because it was shortly after the First World War. There was a shortage of materials in France, and the only cardboard material that was available, because nobody wanted it, is this bright orange color. So Hermes took it because there was nothing else to be had. Who knew it was going to become the icon, the trademark of our family business. We are traded on the Paris Stock Exchange, but more than 70 percent is still owned by members of the Hermes family.

RL: So is the secret of success for Hermes the quality?

RC: I would say yes. Quality is a real key ingredient along with craftsmanship. It’s the commitment to making products that are really going to endure and last for a long, long time. I already think we feel that we belong here at CityCenter. When I read about and saw pictures of the architecture, when I saw the project in total, when you have a Mandarin Oriental that is opening up automatically, it says our clients are going to be staying right here. Then when you see the array of names that is going to be here, you know that it is going to be attracting a very high-end customer. You have Cartier, Tom Ford. And more, and that is going to attract a key client base. Perhaps even a new client base.

RL: MGM’s CEO Jim Murren says that he is convinced that a new kind of customer will come to Las Vegas because of what has been created here. Do you sense that? Do you see that?

RC: I do. I was talking to some people about that yesterday. I really think, because from my own personal standpoint, when I go back to New York, I will say to people, “You really need to go see CityCenter, and you really need to stay at the Mandarin Oriental.” It is a completely different Las Vegas experience. When you pull into that lobby of the Mandarin and you see those bamboo trees, there is a serenity that descends upon you. You would never expect to see or find that here in Las Vegas.

I think that word of mouth among people who have that appreciation is going to get out. That plus the dining, plus now the shopping. It is really going to do it for Vegas. We will get people from all around the world who would not have come to Vegas before. When I look at this shopping area, I see a Rodeo Drive or a Madison Avenue indoors. That is what it reminds me of. You have basically created the world’s finest shopping under roof in Las Vegas and done in a dynamic and incredibly exciting way. That’s extraordinary!

Robin Leach has been a journalist for more than 50 years and has spent the past decade giving readers the inside scoop on Las Vegas, the world’s premier platinum playground.

Follow Robin Leach on Twitter at Twitter.com/Robin_Leach.

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