Hermes boycotts lv acquisition of luxury giants showdown between giants

At the end of 2010, the business warfare story of Paris, the world's fashion capital, also contributed a lot to the luxury empire. Paris, two of the world's top luxury luxury giants LVMH (Louisixuan) and HERMES (Hermes) is setting off a dispute between acquisition and anti-acquisition.

At the end of October, the world's leading luxury goods industry group, the Louis Mouxuan Group, made a sudden announcement that it had successfully acquired a total of 17.1% shares of Hermès with a total value of 1.45 billion euros through the use of financial derivatives tools.

In recent days, Hermès’s hard-line family members rebelled against this “malicious” acquisition. He resolutely stated: "It does not require any form of help and support. It strongly urges Louis Wins to withdraw from Hermès and also requires the French securities regulator to intervene to investigate the legitimacy of LVMH operations."

The luxury empire dispute was once again staged. A company that capitalizes on high-profile capital expansion, streamlined production, and a battle for handcrafted production for a Birkin package that allows consumers to wait six years for the brand, was hailed as a war of money and poetry.

LVMH's plot

"Don't give me Dior perfume? Then come down to my name." Since 1987 LVMH Group CEO Bernard Arnault integrated Dior perfume into the name, the LVMH emperor began its Luxury industry segment acquisitions.

From Givenchy, Sephora in France, Loewe in Spain, TAG Heuer in Switzerland, to Donna Karan, Marc Jacobs and BeneFit in the United States, to Fendi and Emilio Pucci in Italy, LVMH received all of his income. According to Alacrastore, a consulting firm, LVMH has made 62 acquisitions since 1987 and has 74 companies.

Citing the original report of the media in Paris, France, “Everyone wants to know who Arnold has been eyeing this time?” It is also Arnott’s regular reorganization of the complicated corporate structure and the withdrawal of those useless brands. .

In addition, sales of LVMH’s wine and Champagne products have fallen by about 40% in recent years due to large-scale cuts by independent retailers. LVMH has always hoped to sell these brands that need to rely heavily on other independent retailers and concentrate on the brands sold in its own retail stores—those that are more gorgeous and extravagant.

The elegant and luxurious image of Hermès is an appetite for Arnott. Hermes is still one of the few brands that has kept growing in the midst of the gloomy cloud of luxury goods. This kind of performance is very attractive.

Louis Yixuan did have a long time with Hermès. Arnott once explained that as early as the 1980s, some shareholders of Hermès had sold about 10% of the LVMH Group; these shares were sold at the request of the former chairman of Hermes in the early 1990s. According to his subsequent explanation, LVMH has acquired approximately 5% of Hermès in recent years. Analysts said that this shows that LVMH has been planning for a long time and spent a few years on starting to re-arrange the acquisition of Hermès.

In March 2010, Bernard Arnault, CEO of LVMH Group, said in an interview with a reporter from the Wall Street Journal that “it will acquire more companies in the next 6 to 8 months.”

According to Deutsche Bank and other research institutions, the LVMH Group’s acquisition represents a long-term perspective for the group. At present, 55% of LVMH's profits come from Louis Vuitton. Other leather goods brands such as Fendi, Loewe and Celine have been dragging LVMH for many years. Buying Hermès will undoubtedly ease its dependence on Louis Vuitton.

Although current Arnault told the media several times calmly, LVMH will not seek hostile takeovers, nor will it seek seats on Hermès' board of directors. “We will respect the independence of the Hermes family and contribute to the preservation of its family and French characteristics... ..." But this sounds like people always feel familiar. When he became Chairman of the LVMH Board of Directors, he said the same thing more than once, but almost no one could escape Arnott's palm. People still remember that when he bought a 5% stake in GUCCI Group in 1999, Arnault was talking about the same thing and increased his holding of GUCCI to 34% within a month.

At the moment, when local French newspapers reportedly overwhelmed the Hermes family with their dissatisfaction with LVMH Group holding Hermes, Bernard Arnault, president of LVMH Group, stated that he did not care about these negative voices. “I don’t think a private partnership has the right to order Investors relinquish his shares... Our investment in Hermes is long-term, neither targeted at society nor confined by its family.”

As a global luxury crocodile business, LVMH investment Hermes is a further expansion of the territory.