Wednesday, 3 November 2010

Hermès throws down the gauntlet to LVMH

What a sight for sore eyes in today's Le Figaro business section: "Hermès repousse LVMH" - Hermès fights back.

Ten days after the rather surprising and sudden announcement that LVMH had at last managed to buy its way in on his competitor, French artisanry maison Hermès, the gloves between the two competitors - or the shock waves that shook the industry- are off.

Despite a statement of Louis Vuitton Moët Hennessy that there are no current intentions of making an official offer or taking over the Hermès Group though to become a long-term investor, the article published today suggests that this coup was not as amicable and friendly as it was presented at first glance.

Heir Betrand Puech - direct descendant of the founder Thierry Hermès, who in 1837 established Hermès, and CEO Patrick Thomas insist in today's in Le Figaro that the purchase of 17.1% of Hermès shares was an unwanted, undesired and stealth action of Monsieur Bernard Arnault and his conglomerate. 72% of the remaining shares are dispersed within the family.
The duo also point out that the maison clearly was not in need of any capital support, mentoring, guidance or whatsoever from LVMH, as its financial performance has been showing a steady healthy growth since 1993. Hermès' performance was particularly strong during the last year, where many high-end fashion and luxury companies struggled significantly. In the interview, Patrick Thomas goes to such lenghts as to publicly doubt the correctness of the incident and calls the business transactions that have happened end of October 2010 more than just a little strange and even dubious - refering to LVMH business branches in Panama that were involved in the hostile buy into the company.

According to WWD, the French market regulator (AMF) is currently examining the circumstances purchase of the 17.1% shares

To the declaration that the buy-in was of amicable nature, Patrick Thomas and Bertrand Puech reacted indignantly with the response: "If you want to be amicable, Monsieur Arnault, you have to withdraw." - for the sake of completeness, one has to mention at this point that in a phone conversation following the buy-in, Monsieur Arnault had even stated that he does not even claim a seat on the board of Hermès International.

A conspicuous uproar of the last insurgent standing up against being locked in the golden cage of LVMH - after all, "'C'est n'est pas un combat financier, c'est un combat de cultures." Seems like front men Patrick Thomas and Betrand Puech will stop at nothing to impede Hermès International becoming the Koh-i-Noor in Monsieur Arnault's LVMH crown jewels.


xoxo
Glamazone



Source: lefigaro.com, WWD.com
Picture Source: magazine.wsj.com, lefigaro.fr

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