Hermes heirs hold on to family business

Hermes heirs hold on to family business

The heirs of the luxury goods brand Hermes announced on Sunday that they would be keeping their 70 percent share of the firm following plans of the luxury retail company LVMH to up its stake.

“Today, the family holding is, with nearly three quarters of the stock, a large majority and perfectly united in pursuit of a common business plan,” the heirs wrote in a statement.

The family reiterated their commitment to Hermes International and ruled out any major sale of shares.

Global luxury retailer LVMH said on Saturday that it raised its stake in Hermes to 14.2 percent but stopped short of saying it wanted a takeover of the company.

LVMH said it plans to up its stake to 17.1 percent for 1.45 billion euros or $2 billion without demanding a slot in Hermes’ board.

The action by LVMH made it the second largest stockholder for Hermes second only to the family. LVMH had formerly owned five percent of Hermes shares.

The future of Hermes, popular for its silk scarves, leather goods and perfumes, has been murky since the demise of its charismatic leader Jean-Louis Dumas in May.

About 20 percent of the firm’s capital was allowed to float in 1993. The remaining shares were until now controlled by the heirs, which number around 40 individuals, and the management team.

Like most luxury retailers, Hermes has been hit hard by slow consumer spending brought about by the worldwide economic downturn.

But most industry players reported increased sales since the start of this year pointing to a strong rebound.

Posted by Melanie Mendoza on Monday October 25 2010, 8:59 AM EST. Ref: Inquirer. All trademarks acknowledged. Filed under Featured News, Shopping. Comments and Trackbacks closed. Follow responses: RSS 2.0