Hermes is the French scarf and bag maker who actually came onto business way back in 1837. Bags and scarf were not their first business but they started off as a saddle maker. All along its long history Hermes has remained a family owned, family controlled and family managed business. They have maintained their own pace and flourished by adapting to changing times. They have never aggressively pursued the strategy to become a luxury conglomerate but always remained strong in their own space.
Louis Vuitton Moet Hennessy is a luxury goods conglomerate that has acquired several brands over the years to become the largest entity in the luxury industry. They have a very impressive portfolio of brands that includes Fendi, Marc Jacobs, Christian Dior and Dom Perignon champagne, among others. They have normally targeted the family owned businesses with a renowned brand and acquired them to widen the scope of their portfolio. Hermes seems to be the latest on their radar.
LVMH has been increasing its stake in Hermes. In October when they bought some additional shares their stake had gone up to 17.5%. They have now announced that they have bought again into Hermes to raise its stake to 20%. The Hermes family owns 75% of the company and face no immediate danger of losing control but are clearly not amused by the LVMH move. They haven’t called the move hostile but unsolicited.