Away from the spotlight, without any larger-than-life celebrity ambassadors and no splashy Instagrammable events, Hermès is steadily constructing a luxury watch empire.

Hidden in the brand’s recent earnings results, which boast 20.6 percent growth in 2023 over 2022, Hermès reveals that its watch sales have grown threefold in four years, from €193 million in 2019 to €611 million in 2023. The watch category now represents around 4.6 percent of the company’s €13.4 billion total revenues — surpassing the much buzzier beauty category, which in 2023 accounted for 3.6 percent.

As such, the brand has catapulted to 16th place in the top 20 bestselling Swiss watch companies ranking, ahead of established watchmakers Bulgari and Chopard, according to the latest watch report by Morgan Stanley in collaboration with Luxeconsult.

“Hermès went from selling watches as an accessory to elevating them to a self-standing product category,” says Oliver Müller, business consultant and advisor at Luxeconsult.

Hermès is the only brand without a long-standing watchmaking heritage in the top 20. Collectors of timepieces still struggle to take fashion brands branching out into watchmaking seriously, an area where Chanel, Dolce & Gabbana, and Gucci are also competing. Hermès’s success rides on its quiet releases of two modern icons: the H08, introduced in 2021, and what industry insiders consider its feminine counterpart, the Cut, which debuted at Watches and Wonders in April. At this year’s edition of the industry event, it was clear that women’s watches are a ripe area for growth.

“I believe we developed our expertise while cultivating our singularity and our different way of approaching time. This enabled us to be considered as other great watchmaking brands,” says Laurent Dordet, CEO of Hermès Horloger, the heritage house’s watchmaking division. But can momentum continue in such a tough category?

The Long Game
Elevating Hermès to the Olympus of great watchmakers did not happen overnight. Dordet explains that it all started in the early 2000s when the company began implementing its strategy to create a vertically integrated manufacture of timepieces. In 2006, Hermès acquired a 25 percent stake in the Swiss manufacturer of high-end movements, Vaucher Manufacture Fleurier, and opened a leather workshop on the La Montre Hermès site in Brügg, established in 1978.

In 2012 and 2013, Hermès Horloger absorbed two historical partners: Natéber, known for its expertise in dials, and case specialist Joseph Erard. All of these acquisitions culminated in the creation of Les Ateliers d’Hermès Horloger in 2017 in Le Noirmont, Switzerland. Today, Hermès Horloger is a fully fledged watch manufacturer with all skills mastered in-house.

“Having integrated some of the manufacturing processes over time has given the brand a legitimate positioning in ‘haute horlogerie’,” Müller says, pointing to how Hermès progressively introduced more mechanical timepieces alongside the quartz fashion watches it was initially known for.

Case in point are the awards won by Hermès at the Grand Prix de l’Horlogerie de Genève (GPHG), the Oscars of the watch industry, closely scrutinised by collectors. In 2011, with its Arceau Le Temps Suspendu model, Hermès began to build a reputation within the industry. This recognition was then successively reinforced in 2015, 2019, and 2022, with several GPHG awards won across different categories, mainly for masculine timepieces featuring complications, such as the Slim d’Hermès Perpetual Calendar (2015), the Arceau L’heure De La Lune (2019), and the Arceau Le Temps Voyageur (2022). “It was necessary to reinforce our masculine segment to fully express our expertise in watchmaking,” says Dordet.

According to Müller, besides designing award-winning timepieces, these “15 years of repositioning the brand on a much more exclusive market segment” also included a significant reduction in the volume of watches produced and an increase in the average selling price. “The product collection has been cleaned with fewer product families, and all of the remaining lines have strong links to the brand’s DNA,” he says.

In recent years, Hermès has successfully repurposed iconic designs from various product categories into its timepieces. The Cape Cod watch, introduced in the 1990s and inspired by the house’s Anchor Chain motif, for example, has undergone multiple redesigns, including the elevated addition of diamonds. The Médor collection launched in 1993 as a reinterpretation of the collier de chien (dog collar), another classic Hermès style that has since been transformed into a high jewellery watch. More recently, the padlock, a defining feature of the Hermès Kelly, which was first refashioned into a watch in the 1970s, has undergone a refresh with a diamond-encrusted version; Hermès has also expanded the use of Métiers d’Art, featuring rare craftsmanship on the dial.

What’s Next
Hermès is currently focusing on building the icons of tomorrow in the realm of high watchmaking. Debuted at the latest Watches and Wonders, the Cut, a new feminine 36-millimeter cushion-shaped athleisure design, was welcomed by industry insiders, who consider it the female counterpart to the H08, a more muscular, sporty-looking watch introduced in 2021.

“Those two watches are — in my opinion — the most accomplished designs ticking all the boxes of Hermès’s design language. They’re clean and subtle, yet instantly recognisable,” observes Müller.

“When I started thinking about this new design [for the Cut], I had women in mind. That is why you can feel in my work significant thinking about shapes and proportions, playing with soft and bold lines, a search on finishing to have nice light effects and reflections. And also the ergonomics; the watch size is 36 millimeters and feels comfortable on the wrist, it was a key element to me when I created this new collection,” says Philippe Delhotal, director of creation at Hermès Horloger. The watch has already made a strong debut, tapping into the increasing female interest in mechanical timepieces. And the Cut has also been adopted by men, in line with a trend that favors smaller, daintier designs.

The success of new designs such as the H08 and the Cut confirms that Hermès has grown its watches from a “cross-selling category” into “a real business in their own right”, according to Müller. He adds: “Hermès obviously benefits from huge brand equity in its core leather goods market. It took a long time, substantial financial efforts and foremost a long-term strategy to capture the potential, and I say that the brand has just started to earn the benefit of its work.”