We like to be discreet about our customers," murmurs Xavier Guerrand-Hermès in thickly accented English—and moments later is proudly, if not so discreetly, naming his impressive clientele. The 39-year-old Frenchman who presides over Hermès-U.S. is carrying on the family tradition. In 1837 his great-great-grandfather Thierry Hermès (pronounced air-mess) opened a harness shop in Paris. "Our first customer was a horse," Xavier quips, but since then royalty and the unstinting rich have snapped up Hermes custom-made products.

Napoleon III and Czar Nicholas II ordered riding accoutrements from Hermes. In 1906, after an unsuccessful assassination attempt on the life of Spain's Alfonso XIII, the royal stables returned a harness buckle to Hermès for repair. It had been damaged by the bomb.

With shops in 19 countries—and seven U.S. cities including Atlanta and Honolulu—Hermes grosses $100 million a year. Harnesses are no longer available, but ties are, at $45, belts for $175 to $300, handbags ($550 to $2,500) and hand-printed scarves ($85) which come in 800 patterns and as many as 25 colors in a single design. Every handbag is signed and numbered by the Parisian worker who makes it. "It is like creating a painting," Xavier notes. "A man must have seven years' training to attempt it."

Hermès also sells ready-to-wear clothing, perfume, watches, wallets, jewelry and luggage and does interiors for yachts and private jets. Unlike Gucci or Vuitton, Hermès disdains initials. Sniffs Xavier, "If someone knows us, they will know us."

Reigning monarchs are still valued customers—notably Queen Elizabeth and Princess Grace of Monaco, who has carried a Hermès purse for so long it has become known as the "Kelly bag." Jackie Onassis decorated her walls with Hermes scarves. Before his exile, the Shah of Iran ordered mountain boots lined with fur for winters in St. Moritz. Dean Martin paid $15,000 for his six-piece suitcase set. The first time he used the luggage, a case of wine broke open in the airplane baggage compartment and ruined it.

Xavier grew up in Paris with a twin brother, Hubert, and two other brothers and a sister. The family prized formality. Even during summers at his grandfather's house near Cannes the children had to wear white gloves whenever they went outdoors.

After graduating from the Sorbonne in 1963, Xavier moved to the U.S. for graduate work in business at Columbia University. "Sometimes to get away brings you closer," muses Xavier, whose relationship with Hubert in Paris was competitive. "I was born first, but he is regarded as the oldest," Xavier explains. "According to an old Napoleonic law, the first-born is the second conceived. I left France to get my personality together."

In New York, bachelor Hermès has settled into a routine of work, lavish parties and weekends in Connecticut. "We all long for a form of perfection," he notes. "For me a world without Hermes would be a world without beauty." One person who surely agrees is the Texas oil heiress who had Xavier custom-make leather wrappers for her chewing gum—to match her Hermès handbag.