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.

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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.

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