The Hermès boss suggests LVMH boss sell
The new boss of Hermès has – politely – told LVMH boss Bernard Arnault to cash out. Arnault has built up a sizeable stake in the French super-luxe brand, to the considerable annoyance of Hermès.
However, in a recent Wall Street Journal new Hermès chief Alex Dumas advised the LVMH billionaire it would be better for him to sell (the new 43 year old Hermès head replaces non-family exec Patrick Thomas). So far, Arnault claims he does not intend to up his investment. Further investment would be tricky as the Hermès family have ring-fenced 70% of the share capital.
Longer term, it’s suspected Arnault would love to expand production, taking advantage of LVMH’s significant production leverage – given half the chance. But Dumas is understood to be looking closely at ready-to-wear and jewellery in an effort to take on growth pressure of the phenomenally successful brand.
Hermès saw profits soar to €740m in 2012, more than a 150% lift since 2009 when the financial crisis started to bite.