A royal way for Hermès and LVMH

Dear readers,

Many articles speak about the perfect growth of Hermès Group.  

In fact, their numbers increased a lot this year. The group already has a turnover of 590 millions Euros for the third semester (+30,5%) The family group had never been so confident about their luxury business: “ Probably the best year Hermès could works.”

In fact, the luxury area knows an important growth (+11%), it’s probably one of better area nowadays…

We have to know that Hermès is a family business, and they really want to maintain their family work. It’s really important for group members to keep their business image. 


Recently, LVMH had invests on their capital. This investment had caused a lot of discussions because Hermès analysed LVMH attentions. They justified themselves by saying that they pay attention about LVMH investment and they also want to keep their family image “ You can not prevent a family to reflect faced with an intrusion into its capital.”

In fact, Hermès group just wants to show that LVMH has only an investor role for the moment. They also pay attention on their actions because their growth is very important actually.

Hermès possess actually 73% of their own capital and LVMH had announced that they would invest in 14,2% of Hermès capital.

Side of LVMH, Bernard Arnault (LVMH president) wants to invest long term. He also wishes to maintain the image of Hermès. To conclude, their goals are quite the same but we can see a reluctant by Hermès, it’s quite hard to let a part of their capital to the biggest luxury group in the world!

In fact, LVMH knows an important growth too and I am interested about that. I have already written an article about LVMH and its new acquisition of the SMCP group. LVMH is the most important group in luxury area and Bernard Arnault research all intersting opportunities for the development of his group.

I think that strategies of these two groups are really good. On one side, Hermès group researched protection and growth, and on another side, LVMH wants to invest and also increase their presence in the luxury market.

It seems to be difficult to share business success history… but I think that it’s a real advantage for a company to maintain its history and its image.

Regards,

Pauline


Sources:


- http://www.leblogfinance.com/2010/10/lvmh-prise-de-participation-dans-hermes.html
- http://www.lesechos.fr/entreprises-secteurs/grande-consommation/actu/020920153475-hermes-en-route-pour-une-annee-historique.htm