Hermès
Hermès spent its first 100 years on a single Paris street perfecting saddles and harnesses for horses.
Hermès spent its first 100 years on a single Paris street perfecting saddles and harnesses for horses. When the automobile arrived, the company pivoted to leather bags - using the same techniques refined over a century. That patience created competitive advantage that money cannot buy: 185 years of accumulated craft knowledge transmitted through multi-generational apprenticeships where masters (ages 50-70) spend 30-50% of their time teaching rather than producing.
The economics defy modern logic. Each Birkin bag takes 18-48 hours of work by a single artisan who trained for 2-5 years. Hermès maintains 2-6 year waiting lists and deliberately limits production to ~70,000 bags annually despite far greater demand. The company refuses to industrialize, never discounts, and uses minimal branding. The constraint is the message: scarcity proves authenticity.
This strategy navigated 185 years of fashion cycles. When trends shift, Hermès doesn't chase - it waits. Revenue grew every year from 2000-2024 except 2009. The lesson isn't 'move slow.' It's that certain capabilities require time to develop, and once developed, create moats competitors cannot cross. You can copy a Birkin's design in 90 days. You cannot copy the knowledge system that produces it in 90 years.
Key Leaders at Hermès
Thierry Hermès
Founder
Established craftsmanship-first allocation strategy
Pierre Lefèvre
Master Craftsman
41-year veteran who exemplifies transition from production to teaching role
Hermès Appears in 4 Chapters
Founded in 1837, Hermès survived 185 years of fashion cycles through deliberate production constraints and long-lived products designed for multi-generational ownership.
See counter-cyclical strategy →Hermès spent its first 100 years on a single Paris street perfecting saddles before pivoting to leather bags - 187 years of patient early growth.
See patient craft development →Birkin bags are handmade over 18-48 hours by artisans who trained 2-5 years, with masters spending 30-50% of time teaching - knowledge transmission as competitive advantage.
See knowledge preservation →Hermès deliberately limits Birkin production to ~70,000 annually despite greater demand - constraint as costly signal of authenticity.
See scarcity signaling →