Jun 3, 2014
Hermes doesn't want "rival" LVMH as main outside shareholder
Jun 3, 2014
PARIS, France - French luxury goods maker Hermes voiced its frustration at having arch-rival LVMH as its biggest external shareholder at its annual general meeting on Tuesday and once more called on the group to sell its stake.
LVMH, the world's biggest luxury group, which owns 23 percent of Hermes, was fined 8 million euros by the French market watchdog AMF last year for failing to properly disclose its building of a stake before 2010.
Hermes, the 177-year-old maker of Birkin and Kelly handbags which is more than 70 percent family-owned, has been vehemently protesting the presence of LVMH in its shareholder capital ever since it learned of its surprise entry in 2010.
"We do not want shareholders that are rivals," Hermes Chief Executive Axel Dumas told the company's annual shareholder meeting on Tuesday. "We want to preserve our independence."
After the meeting, Dumas told Reuters he was "not aware" whether LVMH would be willing to sell down its stake.
In an interview with Le Figaro newspaper published on Tuesday, Dumas said: "LVMH is totally free to sell its shares and to be honest, would be welcome to do so."
LVMH, owner of Louis Vuitton, Dior and Celine fashion brands, has repeatedly said it was "satisfied" being Hermes' shareholder and backed its management's strategy.
"But satisfied does not mean friendly," Dumas told Le Figaro. And they (LVMH) are not particularly friendly with our management."
Separately, Dumas said Hermes was considering opening a shop in South Africa in the medium term, preferably in Johannesburg. He said he expected sales in Japan, one of the company's biggest markets where sales rose 6.5 percent at constant exchange rates in 2013, would be similar this year.
Hermes shares - which have lost nearly 2 percent since Jan 1 after climbing nearly 17 percent in 2013 - were barely changed in midday trading at 259.2 euros, valuing the company at 27.4 billion euros.
That makes Hermes the third largest luxury group by market capitalisation behind LVMH and Richemont.
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