Hermès (pronounced "air-mez" and never "her-mees") is one of the world's most prestigious luxury brands, and one of the very few that has successfully retained its independence despite widespread consolidation in the sector. So far at least, although in 2010 the group received an unwelcome approach from larger rival LVMH, which accumulated a 22% shareholding in Hermès through the open market, much to the founding family's dismay. Fearing a hostile takeover, the family launched a bitter court battle, which resulted eventually in LVMH's defeat. Hermès is perhaps best-known for that quintessential French fashion accessory, the silk carré scarf. However it also produces a wide range of other accessories, including what are arguably the world's most desirable handbags, of which the most celebrated are the Kelly bag (named after actress Grace Kelly) and Birkin bag (after Jane Birkin). Prices start at around €4,800 per bag, and can go as high as 10x that sum. The group also produces a wide range of other items including ready-to-wear clothing for both men and women, riding clothes and saddles, fragrances and household items as varied as wallpaper and tableware. In 2008, it even oversaw the creation by of six Hermès-branded helicopters, arguably the ultimate in designer toys. All goods are sold exclusively through the group's own stores or online shop. Parent group Hermès International also has a small collection of other interests, including British shoemaker John Lobb. For several years, the group was the main backer of fashion designer Jean-Paul Gaultier but sold its interest in 2011 to Puig of Spain. Though it is publicly quoted, the group is controlled by descendants of Thierry Hermès, who first established the firm in 1837 in Paris to make fine saddles and harnesses for European nobility. More than 70 members of what are now the Guerrand and Dumas families share just over 71% of the company's equity. Axel Dumas is executive chairman and several other family members hold senior positions in the group. Its financial performance has been exceptional in recent years. Revenues reached a record high of €5.5bn in 2017.
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Historical profile information for Hermès
Recent stories from Adbrands Weekly Update:
Adbrands Weekly Update 16th Feb 2017: There have been winners and losers so far in the luxury market in the wake of LVMH's record performance reported last month. Hermès too reported strong growth for the year. Preliminary figures showed revenues topping €5bn for the first time, up 7% to €5.2bn. Prada, however, was less lucky. Its revenues for the year dipped 10% to €3.12bn, down 10% year-on-year, including a 14% slump from its own direct retail channels. Both companies report full figures next month.
Adbrands Weekly Update 26th Mar 2015: French luxury group Hermès showed little sign of the malaise affecting some other luxury groups, with full year revenues for 2014 rising by 10% to a record €4.12bn, and net profits up 9% to €859m. Despite widely reported slowdowns in luxury spending in China, both Japan and the group's wider Asia Pacific markets delivered 13% growth, not far behind the Americas at 15%. Europe managed a respectable 7% growth.
Adbrands Weekly Update 4th Sept 2014: LVMH appears to have accepted an effective defeat in the dispute over its acquisition of a large shareholding in family-controlled rival Hermès. LVMH secretly accumulated around 22% of Hermès' equity in a series of transactions in 2010 and 2011. This was widely seen as the prelude to a takeover attempt, though LVMH insisted it was merely acting as a passive investor. Hermès sued LVMH in an attempt to win back the shares, alleging insider trading. Now, in a court-mediated truce, LVMH and parent entity Christian Dior have agreed to spin off the entire stake equally to shareholders. Bernard Arnault's private investment vehicle, the biggest ultimate shareholder, will end up with a reduced stake of around 8.5% of Hermès.
Adbrands Weekly Update 20th Feb 2014: Smaller luxury groups side-stepped at least some of the slowdown being experienced by other companies in the sector. Whereas LVMH managed only 4% growth last year, the more compact Hermès and Prada each achieved twice that figure, while organic growth excluding the effects of currency fluctuation remained in double digits. Hermès reported preliminary revenues of €3.75bn, up 8% on a reported basis or 13% organic. That was well below the previous year's 25%, but the group remains one of the few still finding room for development in Europe (up 12%), while America and Asia excluding Japan saw rises of 14% and 16% respectively. China in particular remains strong, with sales in that market alone up 19%. "The industry talks of a slowdown in China," said CEO Axel Dumas, "but we didn't feel it... There is no change to the trend." Prada went one better, with reported revenues rising by 9% to E3.59bn, equivalent to 13% at constant exchange rates. Sales at the group's own stores were up 18% organic, while sales in China and America both rose by 15% at constant rates. Europe fared less well at 6% organic. Both companies will report earnings next month.
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