I'm quite intrigued by this development. Last month LVMH stealth purchased a 17,1% interest in Hermès, which is reported to be worth over 2 billion dollars, but claims to have no intention to take over Hermès. At least... "not in the next six months". What is that supposed to mean? And who do they think they're fooling, really?
The folks at Hermès of course, not being idiots, responded in an interview in Le Figaro today and not so kindly asked LVMH to withdraw their capital. Hermès, unlike most luxury brands nowadays, is still family owned. Bertrand Puech, a fifth-generation descendant of founder Thierry Hermès said:
"The family has clearly and unanimously said: If you want to be friendly, Mister Arnault, you need to withdraw."
I have to agree with Hermes CEO Patrick Thomas who stated: "This culture (of craftmanship and strong traditions) is hardly compatible with one of a big group. It is not a financial battle, it’s a cultural battle.” Joining such a large group will no doubt bring many changes with it. Including aspects of the production process if they prove to or are thought to negatively affect the bottom line.
And besides that I suppose the traditionalist in me prefers to see the company remain within the family. Look at what happened to Valentino... I'm just saying...
To be honest, this little stunt makes me curious to know how other brands within the LVMH Group were acquired. Especially considering that LVMH chairman and CEO Bernard Arnault phoned Mr. Puech to inform him just hours before issuing a statement announcing LVMH's acquisition of the Hermès shares. Hermès family members still control the 73% in the firm not currently owned by Arnault, and are awaiting the French market regulator's decision on whether LVMH's stake purchase happened legally.
But ponder this for a minute: If 73% is still within the family, where was the 17% before LVMH got hold of it? In other words, who sold LVMH those shares? Was it a family member? And if so, who's the Judas? And where is the remaining 10% now?
So many questions! I'm curious to see how this plays out...