Hermès appears serious about its new motto: “A sporting life!” The Paris-based luxury retailer has just unveiled a line of handmade bicycles that will roll into its stores next month, priced around $11,000 each. Cycling fits right into that brand of sweatless R&R—rich and recreating. Luxury retail is a savage game, and finding a new product category is a savvy way to squeeze more sales out of the sector. Selling something like a bike, for example, is probably a lot easier than pitching another cashmere shawl. Hermès has effectively worked the same strategy with its saddles, which have been in high demand this year. The same set of customers isn’t likely to flinch at spending a similar amount on a handmade, carbon-fiber bicycle. Plus, Hermès already sells a somewhat more vintage-style cruiser for about half the price.
The company has also been careful to steer clear of the biking crowd. Its new machine is finely crafted and stylish, but serious cyclists won’t be swayed from an array of sleeker and more expensive machines. According to Francois Dore, managing director of Hermès’ Horizons department, it’s just a “real” bike. Part of Hermès' success lies in its restraint. It doesn’t sell a seemingly endless array of opulent products via a crowded house of brands. It picks spots with a fairly curated line. That kind of discipline has kept both its profit margins and annual sales growth around 20 percent in recent years. It’s also one of the reasons investors value Hermes more highly than such competitors as LVMH Moet Hennessy. From that perspective, the bikes might merge nicely with the rest of the Hermès line. But the company should be careful not to stretch its name too widely. It’s debatable how much demand might be for a Hermès baseball bat ($1,850) or, worse still, a BlackBerry case ($460).