Hermes breeds own crocs to meet bag demand

By David Jones

PARIS (Reuters) - French luxury goods group Hermes has resorted to breeding its own crocodiles on farms in Australia to try to meet demand for its leather bags, its chief executive said on Monday.

Customers sometimes have to wait several years for certain exotic-skin bags, which can fetch over 35,000 euros ($48,410).

"It can take three to four crocodiles to make one of our bags so we are now breeding our own crocodiles on our own farms, mainly in Australia," Patrick Thomas told the Reuters Global Luxury Summit in Paris.

Hermes already faces a major challenge producing 3,000 crocodile bags a year, Thomas said, adding: "The world is not full of crocodiles, except the stock exchange!"

Crocodile farming can be expensive, with the reptiles having to be kept apart in separate rooms to protect their skins from bites, but even so allowances have to be made for natural losses that can amount to around a third of bred crocodiles.

Hermes' leather goods, which account for 40 percent of its business, have been the most robust in the current downturn with the group taking on 50-100 leather workers this year to add to the 2,000 craftsmen it already employs at French sites.

Thomas admits the group has been pushing other areas of the business, such as fashion and textiles, so it is not so reliant on leather bags, but says this area continues to be its fastest-growing product line.

"We cannot face demand. We have massive over-demand. We are limited by our ability to train new craftsmen," he added.

($1=.7230 Euro)