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Hermes’ family member throws open door for rival LVMH

Bernard Arnault - head of LVMH
Bernard Arnault - head of LVMH

Nicolas Puech, the brother of Hermes’ executive chairman Bertrand Puech, told a French newspaper that he is not opposed to “a partnership” with rival LVMH, as long as Hermes can remain independent.

Puech, who holds less than 6% of the luxury goods company, said in an interview to France’s Le Journal du Dimanche that he was open to a short-term collaboration with LVMH head Bernard Arnault, who currently holds a 20% stake in Hermes. Though Puech doesn’t have plans to sell his shares to LVMH, he said he was willing to cooperate with the rival company, provided it is “of benefit to Hermes and it can retain its free will.”

His views are in contrast to those of his brother Bertrand Puech, who told Bloomberg in February that Arnault’s stake in Hermes is “not normal”. Bertrand said that he wanted the LVMH family head to reduce his holding by more than half, as Hermes did not want to end up with a shareholder “we don’t like and we don’t want.” (Continue reading here)

LVMH announced back in November 2010 that it had acquired 20% of Hermes through derivates and equity swaps. To protect itself from a potential takeover, Hermes created a holding company to pool all the family shares.

Nicolas Puech, who refused to join the holding company, said in the interview that he opposed its creation, and that it would “deprive family shareholders from having individual power to control the management.”

The Hermes family own 73% of the business founded by Thierry Hermes in 1837. The company announced a rise in 2010 revenues to €2.4 billion from €1.9 billion the previous year.

LVMH is controlled by Groupe Arnault, the Arnault family’s holding company, which owns a 47% stake in the luxury goods business. It also reported excellent 2010 results as net profits rose by almost 75% to €3 billion. Founded in 1987, it last week purchased a majority stake in fellow family-controlled jewellery house Bulgari in a share swap deal. (Continue reading here)

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