Two weeks ago, LVMH attained 17% of the shares of Hermes. The present shareholders of Hermes are not thrilled with this tricky assault.
LVMH is an international luxury group possessing a unique portfolio of over 60 high-status brands. Chairman Bernard Arnault managed, by using derivatives, to gain shares worth $4 billion. Hermes is a French high fashion house known for its leather luxury goods. They consider the participation of LVMH hostile : ‘If you want to be friendly, Monsieur Arnault, then you must withdraw’.
Although Arnault’s method is legal and he emphasizes he has no intention of taking control, it is unfair to the Hermes family. They don’t want to be part of a large conglomerate. Their culture based on tradition isn’t compatible with one of a big group. They fear that the quality and uniqueness of their brand will diminish if LVMH gains control.
Why this article ?
BeantwoordenVerwijderenI believe this is a fascinating part of the dream-formula: although the struggle is fought on the shares market, this is a cultural battle. Hermes fears the awareness of their product will mature too much, taking away some of the exclusivity. They don’t want to be part of a big group.
To summarize: is limiting the shareholder structure/family part of remaining exclusive for your clients?