Fashion Collision Capital: Who Was Moved By Hermes?

In October 24th, LVMH, the world's largest luxury goods group, announced that it had bought 14.2% of Hermes 14.2%, plus a convertible derivative, with a total share of 17.1%, a total of 1 billion 450 million euros, to become the second largest shareholder of Hermes except the family in October 24th.

This news undoubtedly threw a blockbuster, which was bombed in the clouds, except for the lively ordinary people, and the Hermes family itself. They only learned about it one hour before the announcement of the LVMH group.

Although the results sound happy, the traditional luxury brands involved in the capital market? From a commercial point of view, LVMH's shareholding brings great confidence to investors. Within a week, Hermes shares rose 15.12%, closing at 202.85 euros, which is similar to the price of buying a silk scarf.

But at the same time, there is also a lot of doubt. Professional analysts questioned the conditions under which the group led by Bernard Arnott successfully launched this action which prompted the Hermes company to shake it up. From 14.2% to 17.1%, the shares were not required to declare to the certificate authority.

According to the law, the legal way is that when a company or a person purchases 5% of a company's share, it must declare it to the securities regulatory authority.

It has been analyzed that retail investors in the two tier market may be the reason for Arnott's success.

The only thing we can be sure of is that the strong body resistance of Hermes in the financial crisis has attracted Arnott, who controls the huge fashion industrial machinery.

Before that, whether it is Hermes or CHANEL, it seems to many people that the operation mode of LVMH collectivization seems to be two parallel lines that will never intersect, not only the differences in the way of operation, but also the difference in the spirit of brand internalization.

Corporate sniper ambitions

LVMH's actions were early warning.

CEO Bernard Arnott had vague hints in his interview with the Wall Street journal in March. He said he would buy more companies in the next 6 to 8 months.

At that time, the names of Hermes and even the group of peaks were listed on the list of the subjects.

Arnott used the result to talk about this seemingly frenzied M & a plan, which he has been working on.

For the controversy over Hermes and holding, the second major shareholders are always low-key. "We have no intention to further expand the share ratio, but want to be a long-term minority shareholder."

He declared.

The top MBA institutes in the world, such as Harvard and Arnott, are typical textbooks. They advocate their business talents and adventurous spirit.

But others, such as competitors, described him as a "wolf in cashmere sweater". Frequent mergers and acquisitions are not the result, but the intermediate means to achieve his goal.

According to the wolf's thinking, Hermes's great commercial value aroused by mystique is perhaps a piece of fat.

As early as 1984, Arnott, who was 35 years old in the construction industry, had great ambition. He mortgaged his family business and bought ChristianDior company, which was several times larger than himself.

This is not only the starting point of his luxury Kingdom, but also the direct reason for his acquisition of LVMH.

At that time, Dior's perfume business was not run by itself, but it was in the hands of Louis Vuitton. Arnott wanted to integrate perfume into her own Dior. Until 1987, Louis Vuitton combined with MOET & CHANDON Hennessy to become LVMH, Arnott took advantage of a stock market crash that began sweeping the world from the United States, and consumed 43% of LVMH shares at a very low price, thus becoming the "emperor" of the luxury group.

On the basis of LVMH's profitability, Arnott can continue to make big acquisitions in other luxury subdivision industries.

From France's Givenchy, Celine, Spain's Loewe, Switzerland's TAGHeuer, to America's DKNY, Benefit, to Fendi of Italy, these different industries and different positioning companies are all under LVMH income.

According to the data, LVMH has made 62 acquisitions since 1987, and has also held 74 companies to become the world's largest luxury group.

The industry seems to be accustomed to his aggressive business strategy.

Zhao Qian, director of the new international fashion agency, is also the general representative of the French Fashion Association in China. She is very rational about the success of Arnott and LVMH. "LVMH is a very good capital operation company. For it, A or B, regardless of the brand and culture, must realize the goal of increasing value. In essence, they are the most important.

From an industrial point of view, fashion is an industry. We eat upstream in a food chain. This is a very normal rule. "

Some people also describe Arnott's integration style. "He has plenty of money. His dream is to get France first and Italy first." in fact, he doesn't care about money. Hermes is like a beautiful woman. He must marry home.

An-dreaMorante told our reporter.

Andrea is currently the chief executive of RA.MOSpA, Europe's fifth largest jewelry seller. It was founded in 2008 and now controls POMELLATO's 80% stake.

He once led and implemented the GucciGroup acquisition in 1990, the most famous failure of Arnott's business competition with rival Paris spring group (PPR).

Old brand and new era

The most interesting thing is the attitude of Hermes. This stunned family immediately convened an emergency meeting after receiving the news. In a letter of external declaration, the owners of the shares said publicly that they would not sell their shares in any way in the future to ensure that the Hermes family had no control over the brand.

Their view is that at this stage, maintaining the purity of brand DNA is more important than profit.

The story of Hermes is already familiar.

In 1837, the "Hermes harness workshop", serving the aristocracy, was set up to make all kinds of exquisite accessories for horse drawn carriages. At that time, the carriage was also a vehicle for the noble to travel.

During the first World War, the third generation of successors crossed the ocean to the United States. He witnessed the end of the carriage age and the rise of the automobile industry. Hermes was not completely involved in this hot sport. They made two important decisions: first, to shift the main commodities from saddle to handbag; two, even to change the goods, but the manufacturing process still insisted on traditional hand-made.

Hermes is a living fossil left behind in the age of carriage. Its existence means the last line of defense for luxury handcrafted under the background of big industry.

Liu Yi, a French wine net, has lived in France for many years with her husband, studying French wine and lifestyle.

"In French, LVMH has had a long stream of water for Hermes.

Arnott must have thought that buying shares would make so much money. If the Hermes family is not united in the future, it must be the time for him to buy it. "

She said.

The Frenchman's fear comes from a unique emotional bond. The brand of Hermes is raised to another level. Frenchmen from generation to generation can find the relationship between yesterday and yesterday.

"You can't imagine how meticulous and humane the Hermes are. From more than 100 years ago, they wrapped the wire fence of cattle farms with strips of cloth to avoid scratches and scratches.

Their scarf designers can travel for three years, and their wages are paid. No one is pressing him, as long as he can finally hand in his works.

Liu Yi said that the French love everything with industrialization and

In fact, in the cases we can find, LVMH is well versed in asset management.

Since 1993, the descendants of Hermes' shareholders, family member Amir Hermes, have made decisions, and the company is listed on the Paris stock exchange market to raise more funds to help the company develop.

From that day on, what they should think of is that they have entered the track of capital game. "If today is not LVMH, I believe there will be another enterprise to do this."

Zhao Qian believes that in this incident, Arnott's personal intervention force has been overamplified.

But the French are apparently very emotionally difficult to accept the fact that their values are equally important in terms of artificialization and capitalization. Liu Yi thinks that the characteristics of the French are best seen in the traditional way of operation of the Bordeaux chateau, because almost all the owners are inherited from generation to generation and have never changed for centuries.

In Zhao Qian's view, the relatively conservative social nature of the European continent determines the attitude of the French to this incident.

"France is a country recognized in criticism.

Most French people have an instinctive critical attitude towards new things and new technologies. Unlike us, they must be the first wave users of new technologies.

Take mobile phones. In China, it was not popular in France when it was long ago to achieve one person and one machine. France is a relatively conservative society.

They always take into consideration the disadvantage of this thing to the society, and after a relatively long time, they will accept it. "

Perhaps we should give enterprises and people enough time to digest. Why are our views so different in the same event? We all stand at different angles as perceptual animals.

Liu Yi still insists on his own judgement. "Look at Dior now, not bad, but I prefer CHANEL."

Just like the conclusion of a luxury Research Institute in Paris, whether LVMH is pursuing profit seeking or expanding ambition, Hermes's inviolable creed is vanished.