Hermes Faces Off with LVMH
French leather bag maker Hermes said on Tuesday it had filed a complaint on July 10 against LVMH, the world's biggest luxury group, over LVMH's building of a stake of over 20 percent in its smaller peer.
"It is the logical consequence of the questions raised by the terms of LVMH's entry in the capital," an Hermes spokeswoman told Reuters.
LVMH currently owns 22.3 percent in Hermes and now has 16 percent of the voting rights. LVMH, led by billionaire businessman Bernard Arnault, has been gradually increasing its holding in Hermes since it was revealed in 2010 that it had built up a surprise 17 percent stake.
Hermes to Open Fewer Stores
Hermes also plans to open fewer new stores over the next five years to protect its high-end image from over-exposure in a retail market where being one of the most exclusive brands seems to guarantee smooth sailing through global financial turmoil.
"Given risks of brand dilution, we must be prudent. We are going to significantly reduce our store openings to renovate and expand the existing stores," chief executive Patrick Thomas said on Friday after publication of the company's first-half results.
Hermes, which has 340 stores worldwide, still plans to open more stores in Middle East, Latin America and China but not in Europe, the CEO said. It targets a total of 350 to 360 stores in five years.
The French company belongs to the so-called "absolute" luxury sector, which is the most expensive and fastest growing in the luxury market thanks to demand from emerging markets, particularly China.
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