Hermes heirs have no plans to reduce stake: family

24th October 2010, Comments 0 comments

Heirs of the Hermes family, who own 70 percent of the French luxury goods firm, on Sunday said they had no plans to sell any of their stake after luxury retailer LVMH ramped up its share.

"Today, the family holding is, with nearly three quarters of the stock, a large majority and perfectly united in pursuit of a common business plan," the family said in a statement.

The statement said the family remained committed to maintaining control of the company, and did not envisage any significant sale of shares.

LVMH, the world's leading luxury retailer, said Saturday it had upped its stake in Hermes International to 14.2 percent but denied it wanted to take it over.

LVMH said it was looking to boost the stake to 17.1 percent at a total cost of 1.45 billion euros (two billion dollars) but was not seeking representation on the board.

The move made LVMH the largest Hermes shareholder after the family, who own around 70 percent.

There has been speculation about the future of Hermes, known for its fine leather goods and silk scarves, since the death in May of its charismatic head Jean-Louis Dumas.

Previously LVMH owned less than five percent of Hermes shares, the threshold beyond which shareholders must declare themselves.

Around 20 percent of Hermes' capital was floated in 1993. The rest was until now controlled by the family, around 40 people, and the company's management.

The luxury products sector has shown strong growth since the beginning of the year after the global slump hit their business badly in 2009.

LVMH, which counts among its brands Givenchy, Dior and Guerlain perfumes alongside Moet and Chandon and Dom Perignon champagnes, said on October 14 its sales had risen sharply, driven largely by Asia and by demand for champagne.

In July Hermes reported a near 23-percent surge in first half sales and doubled its revenue forecast for the year, with Asia continuing to be the driver.

© 2010 AFP

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