Hermes Resisted Louis Weedon'S Acquisition

In October 2010,

Moore's second deep memory of October 2010 happened in October 23rd, just 3 days after the end of the harvest season.

On that day, Moya was informed that Bernard Arnault, a French business tycoon, launched an attack on his family business, Paris luxury goods giant Herm s International (Bernard Arnaud Herm).

"Everyone in the Hermes family remembers where we were at the moment when we heard the news," said Moya, while his butler filled him with the 2004 deep red, forchus stenburg.

Momeja was driving to watch a rugby match in Toulouse on Saturday afternoon. He heard Arnaud from the car broadcast.

Moya is one of the 72 adult descendants of Emil s Emile Herm s.

Emil s was only a saddle maker in Paris. He pformed the family saddle industry into the Pearl of the world's luxury industry.

As a maker of luxuriant scarves and iconic Birkin and Kelly, Hermes has now become a business tycoon listed on the Paris stock exchange with annual sales of $3 billion 200 million.

However, Hermes has so far strictly controlled the descendants of Amir Hermes, who are now spread across the three continents of the world and are engaged in careers ranging from music DJ, motorcycle sales to investment banks, but they do not want to have any intersection with LVMH Mo t Hennessy Louis Vuitton, a new small shareholder of Hermes.

Bernard Arnaud, the CEO of Louis Weedon and the fourth richest man in the world, has met and overcome his boycott of takeover action in the past.

It was through some, sometimes even outrageous measures, that Louis Weedon, Louis, Givenchy and Guerlain (Guerlain) had more than 50 long history luxury brands. Arnaud was able to make Louis Weedon company the world's largest luxury collection group. "Vuitton"

In March of this year, Arnaud bought a 127 year old Italy jewelry and watch company Bvlgari (Bulgari).

After years of contact and negotiation, Bvlgari's family holders finally agreed to sell shares to Louis Weedon company.

Although the acquisition of Bvlgari is a goodwill acquisition, Arnaud is famous for being good at sowing discordant seeds in the family run enterprises.

In 1980s, Arnaud was invited to join Louis Weedon by Louis Weedon, one of the successors of the Louis Weedon family (Henry Racamier), who was fighting with another family faction in the company.

Arnaud helped him to defeat the main competitors in the family, and he quickly replaced Louis Weedon as the controller of the company.

"Arnaud was very courteous at first," recalled Jean-Louis Masurel, general manager of Louis Weedon. "He will make friends with certain members of the Louis Weedon family and provide them with the position and title of the company.

In this way, he divided the Louis Weedon family and made them their enemies. This is his strategy.

However, in the acquisition of Hermes, Arnaud encountered great resistance.

In the view of the Hermes family, Arnaud is a predator who squeezed Hermes into oil and lamps.

In the words of Emil s's grandson, the current head of the Hermes family and 75 year old Bertrand Pies (Bertrand Puech), Arnaud is "a wolf wearing a cashmere sweater".

In Hermes's office at the flagship store of rue du Faubourg Saint-Honor in Paris, there are pictures and memorabilia of the development of Hermes on all the walls. He recalled that when he was young, he took a pair of shoes with both hands, but ran barefoot across the store hall.

"It's because mom told us that a well-dressed child should always wear shoes," he laughs.

Today, wearing John Lobb Lobb shoes produced by Hermes, shoes with silk shoelaces and Hermes icon orange square block, Pies's dress is perfect.

But he unhappily recalled his experience in October 23rd last year.

PieiTe J Don is taking his granddaughter to Paris's oz train station, when his cell phone rings. It's Arnaud on the phone.

"I want you to know that I have acquired some shares of Hermes, and we are going to issue a press release on this issue," Arnaud told Pies.

A few hours later, the press release announced that Louis Weedon had held 14.2% of the Hermes company and was able to raise its stake to 17%.

Louis Weedon did so in 3 days and raised its shareholding to Hermes again to 20.2% in a few weeks.

Their shock turned into anger after members of the Hermes family learned of Arnaud's rapid increase in his holdings of Hermes.

Arnaud began to buy Hermes' shares gradually from 2001, and hid them in the offshore subsidiaries of Louis Weedon, while ensuring that the total shares of Hermes owned by all subsidiaries were slightly less than 5% of the circulating capital stock, because Arnaud would be forced to disclose details of the relevant shareholding to the French stock market regulator because of more than 5% level.

In addition, Arnaud also bought Hermes stock derivatives (which also circumvent the disclosure rules) and converted them into a total of about 13% of Hermes shares by a series of lightning fast trading last autumn. Arnaud then explained the pactions in detail in the documents provided to the French securities market regulators.

Emil s's great granddaughter, 39 year old Julie Gen (Julie Guerrand), was informed of Arnaud's acquisition of Hermes shares in the morning of October 23rd last year when she received a call from David de Rothschild, chief executive officer of Rothschild & Cie investment bank in Paris apartment.

Gen served in the company for 12 years, but he has been secretly providing advice for Arnaud to replace the Hermes equity paction with stock derivatives.

Julie Gen resigned from Rothschild in March and joined Hermes as the head of the enterprise development department, which made her one of the 25 Amir Hermes descendants in Hermes. [Hermes Patrick Thomas is not a member of the Hermes family. He took the helms from Emil s's grandson and Jean Patrick Thomas Jean-Louis Dimma, who retired in 2006.

].

Arnaud declined to be interviewed for this article, but he once said that he did not plan to become a single major shareholder of Hermes company at the very beginning and did not intend to weaken the Hermes family's control over the company.

At the annual revenue conference held by Louis Weedon in February this year, Arnaud described his investment in Hermes as a "friendly" and "peaceful" move, and said he would like to share with Louis Weedon about his experience in strategy and operation.

The Hermes family is soberly aware that there are many precedents for family businesses to resist external acquisitions.

Bancroft and Bancroft, the owners of Dow Jone am Co and the Wall Street journal, have also tried hard to prevent Rupert Murdoch's takeover attempt until Murdoch spent $5 billion to acquire Dow Jone am Co and Wall Street daily in total. Rupert

The French Titan hot family (Taittinger) once owned Champagne Taittinger, Baccarat crystal and Paris landmark Residencial Lar Do Areeiro Hotel (Hotel Lutetia) and air Long Hotel (H Tel de Crillon) and other industries. However, under the persistent attack of "enterprise attackers" (by means of massive purchases of stocks to control a company's personal or institutional plation), the Titan hot family was struggling, and finally sold the family industry to the US acquisition fund capital capital company in 2005 for a price of 3 billion 200 million US dollars in 2005.

In the face of external acquisitions, the Hermes family's current managers are determined to be different from other families.

They regard Hermes as a fortress against the growing trend of mergers and acquisitions in the luxury goods industry.

Over the past 10 years, the world's three largest luxury goods group Louis Weedon group, Paris spring group (PPR) and Swiss Richemont group have doubled their total share in the global luxury market.

Bain & Co. estimates that the total consumption of luxury goods in the world last year was US $234 billion, and the three big groups achieved a total sales of US $45 billion in.

Founded in 1837, Hermes is a company engaged in harness manufacturing.

Emil s foresaw the end of the carriage era, and turned Hermes' business to the manufacture of leather suitcases and related accessories in the early twentieth Century.

The Hermes family warned that if Hermes is part of the Louis Weedon group, the merciless pressure to seek profits will damage the technological level and family tradition of the Hermes brand, and Hermes will no longer be the original Hermes.

"Louis Weedon has nothing in common with our Hermes," said Axel Dumas, who is responsible for Hermes fur products operations. "Axel Dimma has nothing in common with Hermes," he said.

Axel Dimma used to be an investment banker.

In 2002, Jean Axel Dimma, the now dead uncle and then chief executive of Hermes, recruited him into the company in 2002.

Axel Dimma will be the chief operating officer of the company after the completion of Hermes's restructuring. The upcoming restructuring will arrange for a number of young members of the Hermes family to play an important role in the company.

Outside Axel Dimma's office in the outskirts of Pantin, Paris, workers in the glass curtain wall workshops are folding, gluing and sewing crocodile skin by hand to make Birkin bags.

This scene is entirely the opposite of the industrial pipeline. Each Hermes handbag has been processed by a worker using a small brush to manually peel wax and so on. It takes at least 13 hours to complete.

Just as sports cars attract consumers into the car showroom, the super star Hermes handbag is also placed in the window of the Hermes store in Saint orange street, Paris. It is a Keri bag with bright red crocodile skin, and the other is a gray gold calf leather bag.

The two hermes handbags are not priced, but they sell at least $7000, while the price of the Hermes handbag, which uses ostrich skin and other rare materials, will be over $30 thousand.

The waiting list for Hermes Birkin, named after Jane Birkin, lasted two years.

Keri bag is named after the name of Monaco's Princess Grace Kelly (Grace Kelly) before marriage. Keri used this handbag to cover her pregnant body in the face of paparazzi.

Keri's handbag of Hermes handbag became the cover of American Life magazine.

Hermes has delicately wandering between the classical and star effects. Its advertisement has apparently failed to enable half naked models. The only Hermes sign on most handbags is a few words on the low key "Hermes Paris".

However, Vitoria Beckham (Victoria Beckham) is not low-key in her love for Hermes. She has about 100 beading packages that are dazzling with color and lacquer. Many of the characters in the American TV drama "Gossip Girl" and "Sex and the City" never hide their love for hermes handbags. They carry these handbags on the market, and do everything possible to avoid the waiting list of Hermes.

"Hermes brand has always been very classic. If you buy a Birkin bag, it will never go out of fashion," said Manfred Abraham, a brand consultancy at Interbrand, a London based brand consultancy. "Hermes has many other brands that lack the long-term vitality." Manfred Abraham said.

The Hermes family has a 72% stake in Hermes, which now has a market value of US $16 billion 200 million.

Although most of the shares are currently concentrated in the hands of some family members or family members who set up funds for their spouses and children, these shares still mean that each adult Herman has an average of $225 million in wealth.

In addition, the Hermes family receives dividends from their holdings every year, and the total dividend is expected to reach $160 million this year.

The wealth allows the members of the Hermes family to choose their homes freely and choose careers as they please.

For example, as a member of the Hermes family, Xavier Gen (Xavier Guerrand) is keen to collect North African artworks, and arranges his residence time in a luxury villa in Marrakech, Morocco and an apartment overlooking the Seine River.

Patrick Gen, another member of the Hermes family, has a polo club in Chantilly (Chantilly) outside Paris. (Patrick Guerrand)

Charles Dumas, a 33 year old member of the Hermes family, is called the prince of Charles in the DJ circle by her fans.

As a superstar DJ, Charles Dimma often travels around the world from London, a place of residence, to perform at private clubs such as senior clubs, Naomi Campbell, and Leonardo Dicaprio (Leonardo DiCaprio) and other star clients.

At the age of 49, Moya's winery in Bordeaux also received a lot of praise.

However, not all the members of the Hermes family are happy.

One of the members experienced the ugly divorce of Mstislav Rostropovich, another member of the deceased Hermes family who was arrested for attacking a member of the Air France airways on a flight to New York in Paris in 2008.

Nevertheless, members of the Hermes family are still trying to maintain Hermes.

"Hermes must maintain family control," Charles Dimma said. "Let's give up Hermes as if we were to give up our souls."

The difference between Louis Weedon and Hermes is evident from the door of their headquarters.

The two companies are located less than 1 miles away from the headquarters of the right bank of Seine River in Paris. In an ultra modern office building on Louis Vuitton's Avenue Montaigne on the Montaigne Road, an escalator quickly brings visitors to a lobby full of lights. The TV screens are flashing a fashion show.

In the office of Hermes, visitors have to cross the gate built in nineteenth Century, which is also used as the delivery point for Hermes.

On the upper floor of the office building is a crowded office area, where the founder Emil s's office is also located, where there are still ruined carpets and bakelite phones.

The paved corridors are on the sides of Hermes' workshops, where men and women craftsmen are sitting on a bench and beating and sewing customized suitcases.

For the Hermes family, this building is full of childhood memories.

Julie Gen, an investment banker, ran through antique stores and flea markets to help her father search for old saddles and suitcases, which are now displayed in a small museum next to Amir Hermes's office.

When he was a child, Reno Momeja worked as a part-time worker in the John Lobb shoe department of Hermes. He was responsible for organizing the handwritten file cards of the shoe size of the customers.

Eric Dessena, a 51 year old member of the Eric de Seynes, also worked in the building in that year. He worked with his grandfather, Keri Robert's designer Robert Robert every day for hours.

De Sena is now the head of motorcycle business in Yamaha Motors, YAMAHA.

In Robert Dimma's office not far away from the store, Dessena and Dimma will examine the design of the scarf, and Dimma encourages Dessena to make his own plans.

"Grandpa taught us a philosophy that Hermes is unthinkable," Dessena recalls. "He told us that if we have good product ideas, Hermes can achieve it."

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When Dessena was a little boy, Hermes had fewer than 500 employees, and Hermes had more than 8000 employees today.

Partly thanks to the booming business in China, Hermes has nearly doubled its sales performance over the past 5 years.

In March 4th this year, the Hermes annual report showed that its operating profit in 2010 was $933 million, compared with Louis Weedon's 21% operating profit margin, Hermes's profit margin was as high as 27.8%.

In 2004, the Hermes investor relations department sent a polite letter to a Hannibal company named Luxemburg.

The letter said that the registration examination of Hermes shareholders found that Hannibal held 0.6% of the shares of the circulation of shares of Hermes. Can you make an official statement? Since Hermes has been listed on the Paris stock exchange in 1993, Hermes has asked shareholders to hold more than 0.5% stake to disclose the details of their holdings.

Although the French securities market regulators did not require such small shareholdings to be announced, Hermes wanted to grasp about 27% of the shares held by the Hermes family.

The Luxemburg company did not reply to the letter, nor did Hermes.

The Hannibal company, named after the Carthage commander, who is powerful in tactics, is actually a subsidiary of Louis Weedon.

Luxemburg's corporate documents show that the company was founded in 1993, mainly as a Russian investment in a holding company of Louis Weedon.

Records show that in 2001, Hannibal invested $81 million to acquire a total of about 0.6% of the shares of Hermes.

Louis Weedon said it had acquired other shares in 2001 and increased its shareholding to 4.8% to 4.9%.

It is not clear where Louis Weedon shares the Hermes shares.

Louis Weedon announced last year that the shares of Hermes are held by a company called Altair Holding in Delaware, and 3 Panama companies, but the relevant files in these regions show that these companies were established after 2006 and 2007.

Although Louis Weedon did not comment directly on the holdings of Hermes shares, the company said it was customary for companies to diversify their holdings from different countries, often because of tax avoidance.

According to regulatory documents, since January 2008, Louis Weedon has started trading with Hermes's equity swap deal with 3 banks, which is equivalent to nearly 13% of Hermes's shares.

Louis Weedon has agreed to settle these swap swaps in cash so that there is no need to disclose pactions to securities regulatory authorities.

Between 2008 and 2010, Hermes's share price doubled.

As the first equity swap contract is due to expire in early 2011, Louis Weedon said the company realized that if it finally settled in cash, it would mean that those banks holding equity swap would throw millions of Hermes shares into the stock market, which would suppress Hermes' share price and provide Louis Weedon's competitors with the opportunity to acquire shares of Hermes.

Louis Weedon said this is why the company decided to renegotiate trading contracts with 3 banks and settle all swap pactions with the bank's Hermes equity.

Considering the relatively low price paid by Louis Vuitton for these swaps, Arnaud's chief counsel, Pierre God e, told Bloomberg News in February this year: "this is an incredible opportunity."

The French Autorit des March s Financiers is involved in investigating whether Louis Weedon's pactions violated the relevant securities laws and regulations.

But Jean-Pierre Jouyet, chairman of the French financial market regulator, has said that no matter what the outcome is, Louis Weedon will not be asked to give up its holdings of Pierre.

Bertrand Pies, the current head of the Hermes family, appealed to Arnaud to reduce her shareholding to below 10%, but Arnaud said he had no plans to sell his Hermes shares and claimed he would not be a "passive" investor.

Pies said that since Louis Weedon issued the relevant statement in October 23rd, Arnaud has not had any contact with Louis Weedon except for Arnaud, Gode, Pies and the chief executive of Thomas.

The only meeting was held under Arnaud's proposal. The meeting was held at the Bristol Hotel opposite the Elysee Palace for a total of 30 minutes.

Thomas said: "everyone is very frank and polite, but the scene is not enthusiastic."

When Arnaud joked that his wife could queue up in the waiting list of Birkin bag, Pies responded impolitely, "she has to wait like other people."

On the morning of December 3rd, about 50 members of the Hermes family met in a conference center near Triumphal Arch in Paris under strict secrecy.

According to Olivier Diaz, a Paris lawyer who advising the Hermes family, only a small number of family members knew the specific location of the meeting in advance. Everyone was told to go to a nearby law firm and then be sent to the venue of the conference. Olivier Dia Diaz

The room where the meeting was held was carried out wiretapping in advance, and no minutes of meetings were left.

In the next 4 hours, the members of the Hermes family agreed to lock in 50.2% of the company's shares through a strict equity custody scheme.

According to their plan, these shares are strictly forbidden to be sold outside the country without the consent of more than 75% of the members of the Hermes family.

The plan is still in the audit process of the French financial market authority, but has been approved by the Council.

The other 12.6% of the shares of the Hermes family are not included in the lock up plan to give family members certain reduction of cash space, but once the family members sell the shares, the Hermes family's stock trustees will have a preemptive right.

The result of this arrangement is that even if the next generation of Hermes family intends to sell their stake, it will take at least a few decades to ensure that more than 75% of the family members agree.

In the meantime, the relevant provisions of Hermes will ensure that the appointment of the board of directors of the company has been under the control of the Hermes family.

"If we don't take any action, everyone will not be at ease," said Moya. "Of course, we also know that Arnaud has taken a look at some of the shares held by some of our family members."

The Hermes family has seen some cracks in its fortress against external acquisitions.

Bertrand Pies's brother Nicholas Pies (Nicolas Puech) owns nearly 6% of Hermes's shares, and he has not put his stake in the family's equity custodian.

Nicholas, who owns about 3% of the Hermes family trust fund, has decentralized custody of his shares to avoid possible tax burden, according to people who know about the Hermes family.

The 72 adult members of the Hermes family issued an open letter to Hermes employees on 7 January this year, which identified Arnaud's investment in Hermes as "malicious" and said that the Hermes family was "happy" about the establishment of a trusteeship institution that locked shares.

Nicholas was one of the 72 members of the Hermes family.

But in the March 13th Le Journal Du Dimanche, Nicholas criticized the shareholding trust agreement, which "deprived the family members of their personal power" and said he was open to the assumption of cooperation between Louis Weedon and Louis Weedon.

Bloomberg BusinessWeek, linked to Nicholas, who was in the southern Spanish home, said he had no contact with Louis Weedon, and declined to comment further.

Luca Solca, an analyst at Bernstein Research in London, believes that Hermes may have seen the benefits of cooperation with Louis Weedon, such as the joint negotiation of real estate projects and advertising agreements, without endangering the integrity of Bernstein's brand Research.

"I think the views of the Hermes family are not entirely rational," he said.

According to what they say, why did Hermes go public at the beginning? "

There are other family businesses in the luxury sector showing willingness to cooperate with Louis Weedon.

"The luxury market will become larger and more competitive and geographically, it will become more diversified," said Bvlgari CEO Francesco Trapani (Francesco Trapani).

As the descendant of Bvlgari's founder of Italy jewelry business, Trapani will be the head of jewelry and watch Department of new company after Bvlgari merged into Louis Weedon group.

"If you have the opportunity to integrate the experience of the luxury industry with the scale of operation, the strong financing platform and the global sales network, it will be more likely to achieve greater success," he said.

Take the Louis Weedon brand as an example.

Under the leadership of Arnaud, Louis Weedon has become the world's best-selling luxury brand, and its sales in 2011 are expected to reach $7 billion 200 million.

But some people believe that Louis Weedon's experience highlights the risks that Hermes will face if it is incorporated into the Louis Weedon group.

Quite similar to Hermes, Louis Weedon has been famous for years of craft craftsmanship and handbags.

Arnaud enabled young designer Mark Jacob (Marc Jacobs) to bring Louis Weedon's products with cherry blossoms and cartoon designs.

As sales increased, Louis Weedon's products were highly automated by the management of factory production from the tire and handset makers.

Abraham, a Interbrand brand consultancy, said that today's Louis Weedon has become a "popular" brand, "its craft and personal style are very different from the past".

The Hermes family is bracing themselves for a protracted war with Louis Weedon.

While drinking coffee at the coffee shop on the sidewalk of Place des Vosges, Dessena stretched out her hand from her jacket pocket and took out an old alligator skin wallet with her grandfather's capital name "RD".

In the purse, which is inherited from his grandfather and has 40 years of history, he still holds Robert Dimma's identity card and a photo of Dimma who fled from the house under Nazi prison that year.

"I always carry this wallet, and my grandfather's values are still alive," he said emotionally.