Thursday, October 28, 2010

Business News: Hermes In Danger of Selling Out?


You all know I am a fashion geek, so stop furrowing your brow at this dry subject. I promise I will post pictures of pretty dresses tomorrow.
Hermes, the maker of the most coveted bags and scarves in the world (as well as the super-sexy harness in their last horsey collection here), is currently largely family owned. They have, to my knowledge, refused multiple offers to buy them from very reputable organisations over the years. But this past week Louis Vuitton Moët Hennessy announced that they've bought a 14.2% stake in the traditional French company.
This signalled two things. One, with the Hermes stock price rising sharply at this news, that the market expects this to significantly alter the competitive landscape with LVMH gaining ground against their competitors like Richemont. The Hermes brand is about as luxurious and prestigious a brand as you can get in the market.
Secondly, that Hermes may be in the last throws of family control. LVMH has a reputation of being aggressively aquisitive, as demonstrated in the past, so it is believed that by stealth or power, Hermes will relinquish more stock to the group in due course.
Bernard Arnault, the founder, chairman, and CEO of LVMH is not saying right now, but already has a large collection of covetable fashion brands with Louis Vuitton, Celine, Kenzo, Fendi, Givenchy, Marc Jacobs, Loewe and Donna Karan under his control.