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Hermès Family Fortunes

Hermes print ad horse 2006

Luxury group LVMH acquired what is to be a 17.1% stake in Hermès, it was announced at the weekend. Historically, the group has a tendency to purchase a minority stake before settling in for a full assault on the target acquisition. In order to leverage such a purchase, it is rumoured that LVMH is considering selling off the “MH” part, Moet and Hennessy, which Ogilvy client Diageo is understandably very keen for. Any rumours of takeover may just be that, of course.

But what of Hermès? Zeitgeist has paraphrased current IPA chairman Rory Sutherland before when he spoke of clothes today being about much more than mere “atoms”; these goods, especially in the realm of luxury, are sold on their intangible benefits, not on the assumption that they will merely keep you warm. Hermès, futhermore, really is a world unto itself, having been controlled by the Dumas family (offspring of Thierry Hermès) since its inception. The death of the brand’s patriach clearly left room for a potential hostile takeover.

LVMH must tred lightly however. One of the things that makes the Hermès brand so coveted by so many people around the world is that it is fiercely independent. Its heritage is bound up in the history of a single family, rather than a more homogenous consortium of initials. This family history has, without doubt, strong – though intangible – brand equity for its consumers, for obvious reasons. If it is to become subsumed into a phalanx of other brands however, the loss of this familial association might having a thoroughly tangible impact on the brand’s bottom line.

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  1. October 25, 2010 at 8:58 pm
  2. November 17, 2010 at 7:34 am

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