Handbags at dawn: Hermès vs LVMH is a battle set to run and run

Hermès is "the pretty little flower" that LVMH is set to "kill", according to Patrick Thomas, the CEO of Hermès. LVMH has also been dismissed as "a mosquito buzzing around" and "a visitor in the garden." These were the impassioned responses made in the face of growing momentum that LVMH, the conglomerate that owns Moët et Chandon, Christian Dior, Marc Jacobs, Louis Vuitton and Fendi to name but a few, is positioning itself for a hostile takeover of the 173 year-old French luxury accessories house. The saga began last October when Bernard Arnault, LVMH's chairman, oversaw the purchase of a 17.1 per cent stake in Hermès prompting an investigation by the French stock market regulators and catching the Hermès family off-guard. Arnault said his company would not attempt an aggressive takeover, at least not within the next six months. Thomas told WWD last week: "I don't think a house like Hermès is capable of surviving in a universe controlled by money. This house has proved again and again that poetry is not incompatible with business." Hermès started as a bridle and saddle workshop in Paris in 1837, and has been family owned ever since. In 1956, the Kelly handbag was launched, after Grace Kelly used a large Hermès crocodile handbag to hide her pregnancy bump. Jane Birkin, the French actress and fashion muse, was the inspiration for the equally desirable Birkin bag. Prices for these now iconic bags start at $9,000. Hermès sent a provocative message to LVMH last month when it invited Salma Hayek to be the guest of honour at a cocktail party celebrating their new store in Paris. Hayek's husband is François-Henri Pinault, of PPR, the chief rival to LVMH. It was Pinault's father who managed to prevent an LVMH takeover of Gucci in 1999 - described at the time as a duel between the two richest men in France. Naturally, no one at the party in Paris would admit to such shenanigans. Thomas made sure he was photographed with Hayek but said there was "no message" behind her being there. Hayek herself was clearly in on the act, telling a reporter: "I don't know about investment; I know about shopping." So what happens in the next instalment of the world's best-dressed soap opera? "LVMH is playing a waiting game," an industry analyst told Bloomberg News, adding that LVMH "is putting itself in pole position for an outright acquisition as the conditions appear."