Hermes store in France. PHOTO CREDIT: SAMEER AL-Doumy / AFP / Profimedia
Hermès has become the most valuable luxury house in the world, exceeding a little LVMH. Due to the sudden decline generated by the disappointing quarterly sales, the brand led by Bernard Arnault slipped in second place.
The capitalization of LVMH is currently amounting to 245 billion euros, while Hermès (-0.9% to 2,328 euros) is 246 billion euros, writes 24 hours, quoted by Rador Radio Romania.
The basis of extremely rich customers, the exclusivity of the goods and the strictly controlled production allowed the French fashion house Hermès, producing the famous Birkin model bags, to face the recent slowdown of the luxury sector – which was affected by the regress of the Chinese economy and American tariffs – better than its rivals. An exclusivity also reflected on the market: the actions are traded 50 times the win, a multiple much larger than any other luxury brand.
Thus, Hermès gradually reduced the market value gap compared to the French rival LVMH (Moët Hennessy – Louis Vuitton), owned by Bernard Arnault.
The manufacturer of Kelly and Birkin bags “probably enjoys the highest pricing power, due to the unparalleled desirability of its brand,” according to Barclays, who says the brand will not increase prices as rivals to compensate for Trump's impact on his profit margins.
Moreover, while Bernard Arnault turned the LVMH group into a company with over 80 brands, producing state-of-the-art bags, jewelry and spirits, Hermès remained a single brand.
In 2010, Arnault acquired an action in the company, hoping to bring it to his kingdom, but the advances were rejected by the Hermès Board of Directors.
