
French cuff in fashion
LVMH’s Bernard Arnault isn’t backing away from Hermes — and that is making the family that controls the French luxury handbag maker very unhappy.
The Hermes founding family was “revolted” when Arnault — the hard-charging CEO of European luxury conglomerate LVMH — revealed a 17 percent stake in Hermes last fall, Hermes CEO Patrick Thomas told a magazine this week.
But Arnault, who has since built his Hermes stake to more than 20 percent, said yesterday he doesn’t plan to go away or keep quiet — despite his desire to keep relations “friendly” and “peaceful” with the Paris-based manufacturer of Birkin bags.
“We are a pacifist shareholder, which does not mean that we will be a passive shareholder,” Arnault said after LVMH reported surprisingly strong fourth-quarter profits.
The descendants of Thierry Hermes, a French harness maker who founded the company 174 years ago, have emphasized that the firm they now control through majority ownership is based upon fine craftsmanship.
Accordingly, they’ve voiced their distaste for LVMH and its big, corporate marketing machine, which has gobbled up high-priced labels including Louis Vuitton, Fendi, Marc Jacobs and Donna Karan.
But yesterday, Arnault argued that LVMH was better equipped to ensure that Hermes’s traditional culture and business survives in the long term.
“We can bring [Hermes] a number of advantages both strategically and operationally without anything in return other than our presence as a shareholder,” Arnault said.
The luxury baron added that he sympathized with Hermes honchos, who were startled to discover his sudden investment in the company. He blamed the quick turn of events on his bankers, who had devised complex equity swaps that were converted into shares shortly before they were set to expire.
“I don’t understand anything” about financial derivatives, Arnault insisted. james.covert@nypost.com

