Hermès // 2022 UNIVERSAL REGISTRATION DOCUMENT

RISK FACTORS AND MANAGEMENT RISK FACTORS

COMMERCIAL APPEAL ӳ

4.1.1.2

DESCRIPTION OF THE RISK ◆

POTENTIAL IMPACTS ON THE GROUP ◆

The loss of commercial appeal could lead to a gradual loss of interest from customers.

The commercial attractiveness and desirability of the products are based on the Group’s unique model. The latter is characterised by its radical style, ancestral savoir‑faire mainly “Made in France”, high quality products and services, its openness to local cultures and its unique communication. In a constantly changing world, any failure of the Group to take customer expectations into account, issues with the quality of products or CSR issues could negatively impact the House’s appeal. The attractiveness of products could also be affected by the parallel market and networks of resellers offering a low‑quality customer experience.

IMPACT PROBABILITÉ

RISK MANAGEMENT ◆

The creative offering is the responsibility of the artistic department and its many talented employees, who ensure the creative synergies of the collections while preserving the House’s identity and style. Their mission is to create, innovate, put forward new concepts and collections whose forms, materials and colours will astound customers and be enhanced by craftspeople. The freedom of creation, reinforced by the freedom of the stores to purchase, is exercised while respecting the harmony and coherence of the collections, expressed through an annual theme. Absolute product quality has always been a priority. Tests carried out on all products before they are sold ensures their compliance and durability. The Group has also implemented a support system for its craftspeople and suppliers with a view to developing their savoir‑faire in terms of the expected level of quality. The Hermès Group has introduced a number of tools, both in‑store and online, to enrich the customer experience by raising the level of service to match the quality of its products. The stores are also regularly renovated, the omnichannel offer is being expanded and customer services, such as after‑sales service, are developing. The health crisis has led to an acceleration in the development of the offer of remote services to better meet their expectations. Lastly, the Group continues to structure itself by allocating human and IT resources to fight against corruption in exclusive stores which serves the parallel market.

4

● Strategy and operations ● Industry

● CSR

● Regulatory compliance

● Finance

2022 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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