FASHION POLITICS: LVMH to take over Hermes?

LVMH, the luxury holding company which owns brands such as Dior, Hennessy Cognac, Belvedere Vodka, Givenchy, Fendi, and half of their revenue comes from Louis Vuitton

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They're trying to take over everything European luxury. So it wouldn't be a suprise that Hermes would be their next target. For the past couple of weeks, LVMH has been slowly chipping at Hermes stock. They do sneaky things such as equity swaps to build their shareholding in the company. It moves slowly but head of LVMH, Bernard Arnault says he will slowly take his time. But Hermes ain't havin' it.

The company plans to watch them closely and call them out whenever they're doing something illegal. Hermes which is known for their luxury scarves, and Birkin bags, is not adamant about giving their brand to this powerhouse.

Arnault tried this before and used the same tactic, with Gucci, but Gucci shut it down very quickly.

The thing about Hermes is that it is a family based company, and they're not looking to be broken up. IF LVMH wins, then it will only be taken over if the family agrees to it. Hermes currently have 6 generations down the road.


Hermes biggest defense is the press. They will use the media to make sure that Arnault won't try to bash a weak spot in their company, which will then gain favor to LVMH and Hermes will have to give it to them for the sake of keeping their name afloat.

But, the worth of a share with Hermes raised to $207 when LVMH announced that they own some of it. Okay this is where Hermes needs to kick in their PR people. Call Kelly, she'll make sure that you have all of your stock back.


And Hermes still has open stock in the market in which anyone can buy, and only 10% is left because LVMH has been chomping it away. They plan to take over Hermes in the next years. Hermes needs to find a defense mechanism. The communication is not enough. IF they decide to buy back their stock, it would cost 4.4 BILLION dollars, which would put the company in debt, and their company would lose valuation, which then results in the closing of stores, cheaper fabrics, and scarcity of products. The company is not going to let that happen.



Well, this should be VERY interesting. I love PR. This type of things interest me. You shouldn't play with someones money.