French luxury house Hermès is back under control of the founding family: Axel Dumas has become Hermès’s new CEO, ending Patrick Thomas's eight year reign in a move to better protect Hermès against LVMH's bid to enter the company.
Protect against intruders
Axel Dumas will now lead the company, founded in 1837, that has known unbridled success in the last few years, but which also has to watch out for foreign intruders. Competitor LVMH has bought a 20 % share in Hermès in 2010, even though it did in a rather secretive way which caused a lot of turmoil at the time.
In a response to what LVMH did, the Dumas family moved 51 % of the shares into a separate construction, meaning to protect the family’s majority for at least 20 years. At this point in time, the family owns some 70 % of all shares.
Keep growth going
Axel Dumas’s job will be to keep the company’s growth going strong: turnover grew 82 % between 2009 and 2012, to 3.5 billion euro. Net profit was 740 million euro, an incredible 156 % growth compared to 2009.
To continue this growth, production has to increase and that seems to be an issue as the formation of a new Hermès professional can take up to 2 years, crippling a fast increase in production. “Our production is , which requires important training time”, Dumas told the Financial Times.
43-year old Dumas has a degree in Philosophy at the Sorbonne, law in Paris and also graduated at Harvard. Prior to his entry into the family business in 2003, he used to work for French bank BNP Paribas and co-ran the company with Patrick Thomas since 2013, but he will take full control from now on.