LVMH carving out its territory at Hermès

Could Hermès International one day possibly collaborate peacefully with its most rivalling competitor LVMH Louis Vuitton Moët Hennessy - personified by CEO Bernard Arnault? After fighting out the circumstances of the equity swaps - which resulted in LVMH owning 20.2% shares of the family-owned company publicly, one may doubt so. Despite Bernard Arnault's previous assertions that LVMH's intentions were "peaceful" and of "friendly nature", he recently added in a press conference, that he does not intend to remain a passive shareholder in the company.

Currently, French market regulation is still examining the exact circumstances of the equity swap, which did not only arouse numerous questions within the hereditary family of Hermès but also rose the question of stricter regulations within the French market.
As a consequence to the rather surprising intrusion, the founding family has recently created a holding company, which will enable the family to pool the approximately 70% of shares which remain in its possession and hinder further purchases by external stakeholders.

Despite delivering a more than solid performance in 2010, the LVMH share fell on 4th February after LVMH failed to exceed analysts' expectations. Profits from recurring operations rose by 29% percent to 4.32 billion euros in 2010. The revenue of Louis Vuitton brand drove the profit, with its raised prices and new product lines like the "Monogram Empreinte" collection. LVMH is surely relying on China's growing appetite for luxury within the next years.

The year ahead will surely give direction to the "battle" between Hermès and LVMH and their nip-and-tuck-race in consumer favour.

xoxo
Glamazone


Source: www.bloomberg.com, www.businessweek.com
Picture Source: www.be.com

Fortress of Luxury - Hermès securing its assets

Following the riveting conflict of LVMH taking over 17.1% of Hermès' shares in October 2010, the founding family is bracing itself to preserve its precious heritage.

The extended family of Hermès International - which owns 73.4 of the company - reportedly pooled more than 50 percent of the shares in a holding company. This defence mechanism now depends on regulatory assent.
Within the holding company, a certain part of the future dividends will be put aside and locked up as a security to buy out family members who might want to sell their shares to LVMH.
Despite the fact that none of the family owns more than 5% of the shares - which equals about 0.8 billion euros at current market rates- the clan has profited quite nicely from the LVMH coup.

The market instantly reacted to those precautions: the price of Hermès shares fell by 3.15 percent and settled down at 148.90 euros that very day.
As a result of the common believe after the LVMH buy-in was that Bernard Arnault - CEO of luxury conglomerate LVMH and richest man in France - was about to seize control of Hermès, the artisan brand's shares had risen over 200€ in October 2010.

Bertrand Puech, direct descendant of Thierry Hermès and chair of the management family board at Hermès once more stressed that "LVMH will not be able to take control of the group" and announced that the creation of the holding company was another "demonstration to all those who do not want to believe us. We are a united family, driven by the same spirit of transmitting to our descendants the unique jewel which we have received from our parents."

Let's hope the new fortress wipes away the bitter aftertaste of insecurity and disaccord within the family which might have been stirred up by the peculiar events. And let's also hope that the family members of the Hermès clan did not pull the Trojan horse within its walls.

xoxo
Glamazone


Source: reuters.com, fashionmag.com, ftd.com

Hermès takes a plunge with a new flagship store

Hermès International has opened another flagship store in Paris, Thursday, 18th November 2010. The brand's 134th store comprehends the second biggest sales floor to date and is located on Paris' Rive Gauche on Rue De Sèvres. After 173 years of fidelity to the Rive Droite, the artisanry brand opened its first boutique on the left side of the Seine bank.

The former Lutetia Hotel’s indoor swimming pool, which is offering 15, 800 sq.ft (1467.868 m²), dispersed over three floors, has been converted to a luxurious space displaying Hermès' precious lines of products.

As the opening of the Rue de Sèvres flagship coincided with the launch of Hermès' interior line, nearly half of the space is dedicated to the new home range. The mega boutique showcases furnishings, fabrics, carpets and the new furniture re-editions by Jean-Michel Frank.
Also, the boutique houses three nearly 30-foot-tall huts carved from latticed ashwood, designed by architect Denis Montel of RDA, its own florist, stocked with flora rarities, a book store (Chaîne d’Encre - a little worldplay with Hermès' signature Chaîne d'Ancre) and a salon de thé with the apt name Le Plongeoir (The diving board) situated on its balcony.

As newsworthy as the spectacular interior of the new flagship was the appearance of one special guest amongst the numerous felicitators: Salma Hayek-Pinault, wife of PPR's François-Henri Pinault paid a visit to congratulate on the new retail space extraordinaire. A very political appearance given the recent public conflict between Hermès and PPR's main competitor LVMH. 

Never underestimate the effects of a common concept of the enemy.


xoxo
Glamazone

Source: style.com, rositakerdlarppol.blogspot.com,
Picture Source: style.com, rositakerdlarppol.blogspot.com

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

Jean Paul Gaultier's fulminant farewell

An era has come to an end, Jean Paul Gaultier presented his last collection for French traditional house Hermès on October 6th 2010.

It was not a silent goodbye - it was a swan song with stomping, clapping and attitude. The flamenco sounds thudding out of the speakers were accompanied by appreciative applause of the audience, which had gathered to witness the last extravaganza the designer had created for Hermès' womenswear.

Working with Hermès' best colours, black, chocolat, gold, etoupe, crème, Rouge Hermès and a dash of the signature orange that Hermès uses for all its packaging, Jean Paul Gaultier presented a collection reflective of Spanish dressage look. A whiff of flamenco, a dash of gaucho and a lot of classic noble Hermès equestrian style inclusive of riding crops and harnesses.
The former enfant terrible of French fashion, managed to combine austere elegance, soigné artisanry and signature craftsmanship with a hint of eroticism and his characteristical mischievous wink.

Beautiful tailoring, the savoir-faire of handling the most precious leathers (an exceptional translucent crocodile leather jacket!), Jean Paul Gaultier delivered Hermès chic with the likes of classic pantsuits, ultra-high-waisted pants, leather skirts in various lengths, jodhpur influended pants and elegant mousseline capes. The actual tone of the collection however was set by the fetish-looking, body conscious leather bustiers and torsolettes as well as the elegant blouses endorsed with harnesses. What was it with the harnesses this season? We saw them everywhere (Lanvin, Rag & Bone...).
Naturally, there were also plenty of splendid Hermès accessories (the to-die-for leather bracelets (!) and gloves) and playful modifications of the maison's signature bags (miniature Birkins, miniature Birkins inside semi-translucent Kelly bags, a wicker Kelly...).

A majestic goodbye for Jean Paul Gaultier. We shall see where Christophe Lemaire is leading Hermès' reins to in future collections.

xoxo
Glamazone


Sources: WWD.com, style.com, thebaghagdiaries.com
Picture Sources: WWD.com

I love my scarf

If you consider Hermès scarves to be an old fashioned accessory only appropriate for elder ladies and polished upper class mademoiselles, think again.The traditional French fashion house has launched a new website called J'aime Mon Carre ("I love my scarf"), where the brand proves to be perfectly up to date with zeitgeist and young urban fashion culture.

The website has been launched to mark the creative liaison between Hermès and Parisian ueber-hip concept store Colette , who have teamed up for a special edition of scarves, which will be sold exclusively at Colette during September.

Jaimemoncarre.com is a cool omnium-gatherum of snapshot-like photographs, shortfilms from fashion & style capitals (Paris, London, NYC & Tokyo) and inspiration for Hermes devotees. Classic Hermès carres are featured  in hip & stylish street looks. Colorful pictures feature creative ideas of how to wear the carre as headbands, turbans, tops or belts and of course as a scarf.
Far from dusty, elitist snobbery, Hermès displays the fun and contemporary appeal of its silk pieces and invites younger generations to be creative, cool and sexy with them.

Hip footage, wide arrays of photo material, street style galore, a treasure chest full of ideas and inspiration to target younger trendier customers and involve them in what feels like a community.
A brilliant approach to make the brand accessible to a younger and hipper target audience who might have reservations towards the brand otherwise.


My opinion? Do I really have to spell it out? I heart Hermès.

xoxo
Glamazone 


Sources: jaimemoncarre.com, elle.co.uk