Tuesday, 16 November 2010

Can Richemont Save Hermes From LVMH Takeover? 16/11/10

There has been a lot of controversy and speculation surrounding LVMH’s recent acquisition of Hermes shares. We have stumbled across a very interesting article by Bloomberg here at the MO Down. If Hermes needs a white knight to ride to its defence, to fend off any prospective (and potentially hostile) majority buyout by Monsieur LVMH Bernard Arnault, they may find it in Richemont. The Swiss luxury goods company, and third largest luxury conglomerate in the world, might just have room in their wallet for a hint of orange.

Bloomberg hypothesises that Richemont may not have enough money, however in the financial overview from the Richemont press release, sales have increased by 37 per cent, or 27 per cent at constant exchange rate, or 22 percent excluding the impact of Net-A-Porter with an increase in operating profit of 95 per cent. It’s a great result that could compound even more positively over the next 6 months (boosted by Christmas and Chinese New Year trading). It’s nice to know Hermes has another option should it require.

Still, we hope Hermes has enough Euro in its Birkins to canter ahead confidently without support. The family shareholders, who collectively own 73 per cent of Hermes are fighting hard to keep the company independent. We are following all happenings closely and will report as soon as we hear.

Image credit:travel.webshots.com

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Who's behind the MO DOWN

Melinda O’Rourke is the founder and Director of MO Luxury, a dynamic, Sydney-based management firm specialising in luxury brands and services. Melinda and her associates at MO work with local and international brands across prestige retail, fashion, fine jewellery, timepieces and specialised services. Melinda is well-connected, well-read, and well-versed in the demands of the luxury market and its client base. Her advice is firmly based in objectivity and ultimately, accountability. Melinda offers constructive counsel and both strategic and creative thinking and is able to draw upon a strong network of specialised talent to compliment the MO Luxury team as needed. Melinda enjoys excellent industry relationships and is regularly quoted in the business and fashion media. Read more about MO Luxury, www.moluxury.com.au