Monday, March 21, 2011

Herm�s Case Study

By: Valentina Franco



Herm�s is a major fashion company that prides itself on its heritage, craftsmanship and luxury. It started in 1837 as a harness shop in Paris for horses and carriages, and later expanded onto the production of saddles. By the 1900�s, Herm�s started to create travel bags, handbags, belts, gloves, and other leather goods that resemble the products that are available today. Since its establishment by Thierry Herm�s, the Herm�s family has been in charge of the business, so far having six generations of Herm�s heirs at the forefront of the company.

The Herm�s Family Directors through the Years



Two of the most recognized Herm�s products are the Kelly bag and the Birkin bag. The Kelly bag was introduced in 1935 as the �sac � d�p�ches� but it was made famous in 1956 by American actress and then Princess of Monaco, Grace Kelly when she used it to cover her pregnancy from the paparazzi. The Birkin bag was created in 1984 for English singer and actress Jane Birkin, after she ran into Robert Dumas in a flight from London to Paris and heard her complain that she didn�t have a proper bag to carry all the things she needed to put in a handbag. Both of these handbags are a status symbol since their economic value is extremely high. These bags are unique and recognizable, carrying with them an aura of prestige and luxury unlike any other bag.

Grace Kelly covering her pregnancy with an Herm�s bag


Video: The Herm�s Saddle Stitch

http://www.youtube.com/watch?v=9fHYcnrSie8v


The past year, 2010, was a very profitable year for Herm�s which explains LVMH�s interest in purchasing part of Herm�s� stock. By December 2010, LVMH had purchased 20.2% of Herm�s� shares, which triggered a very negative reaction from the company�s CEO Patrick Thomas, and all the Herm�s family heirs. Threatened by the differences between Bernard Arnault�s vision and business perspective and Herm�s� traditional and exclusive views, Herm�s decided to apply to the Board of the Autorit� des March�s Financiers (AMF) in order to create a holding company with 51% of Herm�s� family shares. In January 2011, the AMF ruled in favor of Herm�s� petition, and therefore protected the legacy and tradition of the French company Herm�s.





Herm�s ad video "La Vie Comme une Conte" Automne/Hiver 2010

http://www.youtube.com/watch?v=sqwLITEp_vo

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