Haute Couture: Hermès Family to Propose Statute to Protect Brand

Image: fashionchronicles.com

French luxury brand Hermès is taking additional measures to ensure that LVMH, who currently owns 22.3% of the company, does not have the opportunity for a takeover. Though LVMH has never confirmed any intent on doing so, Hermès isn’t taking any chances.

LVMH purchased a large stake in Hermès in 2010 and currently they own 22.3% of the company. The old French luxury label is rooted in craftsmanship and tradition and the Hermès family are concerned that if there is a hostile takeover by French conglomerate LVMH, they could lose a significant stake in their own company.

Last year, claiming it is a “cultural battle, not a financial one,” Hermès created a separate family holding company in order for them to control over 50% of shares and protect those shares from LVMH. Now, Hermès is planning on taking two additional steps to protect their brand. During the upcoming annual shareholders meeting, the family will reportedly propose to name Nicolas Puech, who is the single largest family shareholder, as the 11th member of the board. In addition, the family will propose a statute that would require all shares over 0.5% to be registered to the shareholder’s name in order for the family to properly monitor all acquisitions.

Source: Fashionista