The Hermès Story: How The Dumas Family Became One Of The Wealthiest Families In The World
The contemporary world consists of absolutely extraordinary wealth and huge inequality between the wealthiest billionaires and average middle-class citizens. The aggregate net worth of the world's 25 wealthiest families is $1.1 trillion. The Dumas family is the fifth wealthiest family in the world, with a total net worth of $53.1 billion. The Dumas family is well-known for their iconic Parisian mansion and enormous wealth. So let’s discover how the Dumas family became one of the wealthiest families in the world.
In 1837, Thierry Hermes founded the family business. Long before the famed scarves and Birkin bags, Hermes was a harness maker who supplied equipment to European royal households. Emile-Maurice, his grandson, updated the family company. He recruited his buddies Louis Renault and Ettore Bugatti to create automobile trunks. Additionally, Emile-Maurice broadened the business into furniture, belts, and haute couture. Jean-Louis Dumas, a descendant of Thierry Hermes, is credited with transforming Hermes into a global luxury fashion powerhouse.
Emile-Maurice has three female offspring. All of them married successfully and gave birth to three new family branches: Guerrand, Puech, and Dumas. This is why no one in the family currently bears the name Hermes. Robert Dumas, Thierry's son-in-law, proposed in the late 1930s that the company expand its racing silks into scarves and neckties; he produced a few samples himself. Something took flight. Robert Dumas took over the company from Emile-Maurice in the 1950s and managed it for three decades.
One of Dumas' five sons, Jean-Louis, was chosen CEO and creative director of Hermes in 1978. Jean-Louis is credited with making the company into the luxury powerhouse it is today. With the support of his cousins Patrick Guerrand and Bertrand Puech, he shook up the nearly 150-year-old family firm. He reintroduced the Kelly handbag in a range of colorful products. He developed a bag for It Girl Jane Birkin that was built to her specifications and named after her. He went on an acquisitions spree, adding Puiforcat silversmiths, Saint Louis crystal, and John Lobb shoes to the family company's inventory.
In 2004, Dumas hired Jean-Paul Gauthier—the bad boy designer to produce a women's wear line for Hermes. Dumas already had a 35% share in the French designer's namesake company. Thierry Hermès was a skilled craftsman who made harnesses and saddles for horses. His products were highly sought after, and he quickly gained a reputation for producing high-quality goods. As the demand for his products grew, he expanded his business to include other leather goods such as luggage, handbags, and belts.
Nevertheless, perhaps the most important contribution Jean-Louis made to Hermes occurred after watching Bernard Arnault's long boardroom battle with the Vuitton family in the late 1980s for control of LVMH. Dumas set two things into effect that would shield Hermes from a takeover battle from a non-family member. In 1989, he founded a business called Emile Hermes SARL to represent the family shareholders. This company is in charge of hiring managers and creating the strategy for the organization.
Finally, in 1993, Dumas put 4% of Hermes on the French stock exchange, enabling newer generations a way to liquidate while allowing the family to preserve control. The publicly traded shares of Hermes do not have any influence over the company's management. Jean-Louis Dumas was able to expand the product lines of the company to include ready-to-wear clothing for men, dinnerware, and furnishings thanks to the proceeds from the sale of shares. The revenues reached $1.9 billion in 2006, representing a fourfold increase from 1989.
The expansion was seen by Bernard Arnault. In the same manner that Dior and Fendi did, he was able to seamlessly integrate Hermes into his expanding portfolio of luxury goods enterprises. In 2002, he started purchasing shares in the company. The revelation that Jean-Louis Dumas owned 17% of Hermes was made public in 2010, the same year that he passed away. A takeover appeared inevitable. It was anticipated that the Hermes family would accept the money and relinquish control of the business.
In 2011, more than 50 people descended from Thierry Hermes combined their individual holdings to form H51, which was essentially a $16 billion cooperative. The contributions accounted for 52% of the total shares in the corporation. The contributors came to an agreement that they would not sell any shares for the following 20 years. Bertrand Puech, who is now 82 years old, and his son Nicolas Puech retained their shares out of H51 but promised to give the family the right of first refusal if they ever choose to sell their interests.
The cohesive effort put out by the Hermes family members has proven to be beneficial for the business. The limit on selling shares for the next two decades gives the corporation the ability to make long-term decisions as if it were a private enterprise. Now, the company is run by Thierry Hermes's descendants, who are now in the fifth and sixth generations. Axel Dumas, a descendant of the Hermes dynasty for the sixth generation, has held the position of CEO since the beginning of 2014.
Hermes has been successful in large part because there is an ongoing need for the leather items that it produces. The starting price for a Kelly handbag is $8,450. Prices for the Birkin bag begin at $8,850. Even though they come with a hefty price tag, Hermes bags are much sought after. It is said that Victoria Beckham owns a collection of more than 100 Birkin bags that is worth more than $2 million. Today, the Dumas family remains heavily involved in the management of Hermès International S.A. The company is still known for its commitment to quality and craftsmanship and is one of the most prestigious luxury brands in the world.
Sources: Celebrity Net Worth, Business Insider, Forbes
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