Who Owns Hermès?

Hermès is primarily owned by the Hermès family, which through its holding company, H51, holds the majority of the company’s stake. Hermès is one of the few luxury brands that remained independent from large groups like LVMH. Yet, by 2023, the Arnault family, which owns LVMH, amassed a stake in Hermès of around 20%. This prompted the Hermès family to consolidate its ownership in a new holding to prevent the takeover from Bernard Arnault. In 2022, Hermès generated €11.6 billion in revenue and €3.36 in profits.

Detail	Description
Company	Hermès International S.A.
Ownership Structure	Publicly traded company with significant family ownership
Major Shareholders	Hermès family (approx. 66%), LVMH (approx. 20% stake), institutional investors, and individual shareholders
Founding Date	1837
Founder	Thierry Hermès
Headquarters	Paris, France
Primary Business	Luxury goods including leather goods, fashion, accessories, perfumes, and home furnishings
Strategic Goals	Preserving brand heritage, maintaining exclusivity, expanding global retail presence, and innovating with new product lines and craftsmanship techniques

Table of Contents

Additional Ownership Details

Corporate Structure and Ownership: Hermès International S.A. is a publicly traded company listed on the Euronext Paris under the ticker symbol RMS. Despite being publicly traded, the Hermès family retains significant control over the company, owning approximately 66% of its shares. This family ownership ensures that Hermès can maintain its independence and uphold its core values of quality, craftsmanship, and exclusivity. In 2010, LVMH Moët Hennessy Louis Vuitton S.E. acquired a stake of about 20% in Hermès, leading to tensions between the two luxury giants. However, LVMH later distributed its shares to its own shareholders in 2014, reducing its direct involvement.
History and Brand Heritage: Founded in 1837 by Thierry Hermès as a harness workshop in Paris, Hermès began by serving the needs of European noblemen. Over the years, the brand expanded into saddlery and began producing leather goods. Hermès is renowned for its commitment to quality and craftsmanship, producing iconic products like the Birkin and Kelly bags. The brand’s emphasis on timeless elegance and exclusivity has cemented its reputation as one of the world’s leading luxury houses.
Corporate Strategy and Business Model: Hermès operates a business model that focuses on high-quality craftsmanship, limited production runs, and controlled distribution, which helps maintain its products’ exclusivity and desirability. The brand invests in skilled artisans and sustainable materials to ensure the highest standards of quality. Hermès’ strategy includes direct retail distribution, with a network of over 300 exclusive boutiques worldwide, which allows the company to deliver an unparalleled customer experience.
Product Lines and Innovation: Hermès offers a diverse range of luxury products, including leather goods, ready-to-wear fashion, silk scarves, watches, jewelry, perfumes, and home furnishings. The brand is known for its innovation in design and materials, often combining traditional craftsmanship with modern techniques. Hermès continuously expands its product lines, introducing new collections while staying true to its heritage. The brand’s commitment to innovation is exemplified by its integration of sustainable practices and materials, such as the use of environmentally friendly leathers.
Global Market Expansion: Hermès has a strong global presence, with key markets in Europe, Asia, and the Americas. The brand continues to expand its retail footprint, focusing on flagship stores in major cities and emerging markets. Hermès’ expansion strategy emphasizes careful market entry and local adaptation, ensuring that each store reflects the brand’s values and caters to the preferences of local consumers. The brand’s focus on exclusivity and quality has helped it build a loyal customer base worldwide.
Brand Positioning and Marketing: Hermès positions itself as the epitome of luxury and elegance, emphasizing its heritage, craftsmanship, and exclusivity. The brand’s marketing strategy is subtle and sophisticated, often relying on word-of-mouth and the aspirational value of its products. Hermès maintains a strong presence in prestigious fashion shows and collaborates with renowned designers and artists to create unique collections. The brand’s iconic orange box and horse-drawn carriage logo further reinforce its luxurious image.
Leadership and Governance: Hermès is led by Axel Dumas, a member of the Hermès family, who serves as the Executive Chairman. Under his leadership, the company focuses on maintaining its independence, enhancing its product offerings, and expanding its global reach. Hermès’ governance structure ensures that the family retains control over strategic decisions, allowing the company to preserve its values and heritage. The board of directors includes family members and experienced professionals who guide the company’s growth and innovation.

Aspect	Description	Analysis	Examples
Products and Services	Hermès offers a range of luxury products and services, including leather goods (handbags, wallets, belts), fashion apparel (ready-to-wear clothing, scarves, ties), footwear (shoes, boots), watches, jewelry, perfume, and home goods (tableware, linens, furniture). The company also provides made-to-order and customization services for select products, allowing customers to personalize their purchases.	Hermès’ product lineup epitomizes luxury and craftsmanship, catering to a discerning clientele seeking exclusivity and quality. The inclusion of customization services adds a personalized touch and enhances customer satisfaction. The brand’s emphasis on artisanal craftsmanship sets it apart in the luxury market.	Handbags, wallets, belts, ready-to-wear clothing, scarves, ties, shoes, boots, watches, jewelry, perfume, tableware, linens, furniture, made-to-order, customization services, luxury, craftsmanship, exclusivity, customer satisfaction, artisanal production.
Revenue Streams	Hermès generates revenue primarily from the sale of its luxury products. Sales are driven through a network of company-owned boutiques and high-end department stores worldwide. The company also earns income from its perfume and beauty line, as well as licensing agreements for select products. Limited editions and collaborations can create additional revenue streams.	The primary revenue source for Hermès is the sale of luxury products through its boutiques and high-end retail partners. Diversified revenue streams, including perfume and licensing, reduce reliance on specific product categories. Limited editions and collaborations add exclusivity and boost sales.	Revenue from luxury product sales, boutiques, high-end department stores, perfume and beauty line, licensing agreements, diversified revenue streams, limited editions, collaborations, exclusivity, increased sales.
Customer Segments	Hermès serves an exclusive and affluent customer base that values craftsmanship, quality, and luxury. The brand caters to high-net-worth individuals, collectors, and fashion enthusiasts seeking iconic and timeless pieces. Hermès’ products are designed to appeal to customers with discerning tastes and a desire for unique, well-crafted items.	Customer segments for Hermès consist of high-net-worth individuals, collectors, and fashion connoisseurs who appreciate the brand’s craftsmanship and timeless designs. Hermès’ products are positioned as investment-worthy, and the exclusivity of the brand appeals to customers seeking unique and prestigious items.	High-net-worth individuals, collectors, fashion connoisseurs, craftsmanship appreciation, timeless designs, investment-worthy products, exclusivity, prestigious items, unique appeal.
Distribution Channels	Hermès products are primarily distributed through a network of company-owned boutiques located in major cities worldwide. The brand also partners with high-end department stores to expand its reach. E-commerce and digital platforms allow customers to browse and purchase products online, enhancing accessibility.	Distribution channels for Hermès comprise company-owned boutiques in major cities and partnerships with high-end department stores. The brand’s presence in prestigious locations emphasizes exclusivity. E-commerce and digital platforms provide convenience and extend accessibility to a global audience.	Company-owned boutiques, high-end department stores, prestigious locations, exclusivity, e-commerce, digital platforms, convenience, global accessibility.
Key Partnerships	Hermès collaborates with select partners to enhance its offerings and expand its market presence. The brand may partner with renowned artists, designers, or celebrities for limited edition collections or collaborations, creating buzz and attracting new customers. Strategic partnerships with suppliers ensure access to high-quality materials.	Collaborations with artists, designers, or celebrities create exclusive collections, generating excitement and attracting new customers. Partnerships with suppliers ensure a reliable source of high-quality materials for Hermès’ artisanal production. These partnerships contribute to brand prestige and innovation.	Collaborations with artists, designers, celebrities, exclusive collections, excitement, new customer attraction, strategic partnerships with suppliers, high-quality materials, brand prestige, innovation.
Key Resources	Key resources for Hermès include its skilled artisans and craftsmen, high-quality materials (such as leather, silk, and precious metals), iconic designs, brand heritage, a network of boutiques in prime locations, a dedicated workforce, and financial resources for research, development, and expansion.	Hermès’ resources encompass a pool of highly skilled artisans, premium materials, iconic designs, brand heritage, prestigious boutiques, a committed workforce, and financial resources for innovation and growth. These resources are instrumental in maintaining Hermès’ reputation for luxury and craftsmanship.	Skilled artisans, high-quality materials, iconic designs, brand heritage, prestigious boutiques, committed workforce, financial resources, luxury reputation, craftsmanship.
Cost Structure	Hermès incurs various costs related to its operations, including expenses for raw materials and high-quality materials, artisan salaries and benefits, design and development costs for new collections, marketing and advertising expenditures to maintain brand presence, rent and maintenance costs for boutiques, research and development investments, and administrative overhead. Costs associated with skilled labor and high-quality materials are significant.	Costs associated with Hermès’ operations include raw materials and high-quality materials, artisan salaries and benefits, design and development expenses, marketing and advertising costs, rent and boutique maintenance, research and development investments, and administrative overhead. The cost of skilled labor and premium materials is a substantial operational expense, contributing to the brand’s luxury positioning.	Raw materials, high-quality materials, artisan salaries and benefits, design and development expenses, marketing and advertising costs, rent and boutique maintenance, research and development investments, administrative overhead, significant skilled labor and premium material costs, luxury positioning.
Competitive Advantage	Hermès’ competitive advantage lies in its commitment to artisanal craftsmanship, the use of premium materials, iconic and timeless designs, and its exclusive and prestigious brand image. Collaborations and limited editions add excitement and attract a wider audience. The brand’s heritage and focus on quality set it apart in the luxury fashion market.	Hermès’ strengths include artisanal craftsmanship, premium materials, timeless designs, exclusivity, and a prestigious brand image. Collaborations and limited editions generate interest and broaden the customer base. The brand’s heritage and unwavering dedication to quality distinguish it within the luxury fashion industry.	Artisanal craftsmanship, premium materials, timeless designs, exclusivity, prestigious brand image, collaborations, limited editions, interest generation, heritage, quality dedication, differentiation in the luxury fashion industry.

Origin Story

Hermès is a French fashion house that was founded in 1837 by Thierry Hermès.

The company began as a harness workshop that created premium leather goods for horses and carriages. Over time, Hermès expanded its operations and now specializes in perfumes, jewelry, furniture, lifestyle accessories, and ready-to-wear.

Parisian workshop

The history of Hermès started in 1837 when harness maker Thierry Hermès opened a workshop in the Grands Boulevards quarter of Paris. The workshop was initially founded to serve the needs of European noblemen and offered bridles, saddles, feed bags, and various other leather products.

The workshop soon earned a reputation for quality and simplicity, with the harnesses in particular praised for their endurance and discreet finesse. Hermès later won two first-class medals at the Paris Expositions in 1855 and 1867.

New headquarters

When Thierry passed away in 1880, ownership of the company passed to his son Charles-Emile. The workshop was moved to 24 Rue du Faubourg Saint-Honore in the 8^th arrondissement of Paris, and Hermès headquarters is still at this location today.

Charles-Emile continued his father’s artisan saddler tradition but focused on international expansion with lines that catered to the elite in Russia, North Africa, Asia, the Americas, and other parts of Europe.

Charles-Emile retired in 1902 and passed the business to his sons Adolphe and Emile-Maurice, but not before he introduced the Haut à Courroies leather bag. With a specially designed trapezoidal shape, the bag allowed customers to carry their saddles and other paraphernalia.

Hermès Freres

After the brothers took over the company, they renamed it Hermès Freres (Hermès Brothers). In 1914, the company could boast the czar of Russia as one of its clients and employed around 80 skilled craftsmen.

The company later secured exclusive rights to the use of zippers on leather products and was the first to introduce them in France. In fact, when the Hermès leather gold jacket was released in 1918, the zipper was known as the Hermès fastener.

Expansion

When the introduction of the motor vehicle caused horse-related equipment sales to decline, Adolphe Hermès left the company with his brother buying him out.

In 1922, Hermès introduced its first leather handbags after Emile’s wife complained that she could not find one she liked. Three years later, the company established a presence in the United States and in 1935, debuted the Sac à Dépêches (messenger) bag which was popularized by American actress Grace Kelly.

Silk scarves and silk ties followed in 1937 and 1949 respectively.

Change of ownership and changing fortunes

Emile Hermès was succeeded by his son-in-law Robert Dumas in 1951. Dumas developed or introduced many successful products over his time at Hermès such as handbags and jewelry, but he was particularly enamored with his silk scarves.

Hermès started to decline relative to its competitors in the 1970s, with some believing the company’s insistence on natural products made it less desirable than competitors who used synthetic materials.

However, consumer preferences soon turned back to natural products, and when Dumas’s son Jean-Louis became chairman in 1978, he reaffirmed the company’s focus on silk, leather, and ready-to-wear. Crucially, he augmented traditional techniques with new products to make Hermès more contemporary.

Hermès goes public

Hermès went public on the Paris Bourse in June 1993 and its shares were oversubscribed some 34 times over. At the time, various members of the Hermès family owned about 80% of the company, with many of them (and Jean-Louis) becoming billionaires.

Over the 1990s, the company aggressively reduced the number of franchised stores to better control the sales of its products. In 1999, Hermès took a 35% stake in the French fashion house Jean-Paul Gaultier.

Jean-Louis Hermès retired in 2006 after a storied and celebrated career in fashion. He was replaced by Patrick Thomas – company co-CEO since 2005 – who became the first person outside of the family to lead the company.

Key takeaways

Hermès is a French fashion house that was founded in 1837 by Thierry Hermès. The company started as a harness workshop that created premium leather goods for horses and carriages. Over time, Hermès expanded its operations and now specializes in perfumes, jewelry, furniture, lifestyle accessories, and ready-to-wear.
When the introduction of the motor vehicle caused horse-related equipment sales to decline, Adolphe Hermès left the company with brother Charles-Emile buying him out. In 1922, Hermès introduced its first leather handbags after his wife complained that she could not find one she liked.
Emile Hermès was succeeded by son-in-law Robert Dumas in 1951. Dumas developed or introduced many successful products over this time at Hermès such as handbags, jewelry, and silk scarves. After turning the company’s fortunes around, Dumas oversaw a successful IPO that was 34 times oversubscribed.

Related Case Studies