Hermès, the saddle maker that became luxury’s most valuable family business

Thierry Hermès opened a workshop making harnesses and bridles in Paris in 1837. His customers were the carriage owners of the city’s wealthy families. The company moved to 24 Rue du Faubourg Saint-Honoré in the 1880s, and the store is still there.

As cars replaced horses, the family moved into leather bags, luggage, scarves and clothing.

The bags

The Kelly bag took its name from Grace Kelly, who was photographed with one in the 1950s. The Birkin came in 1984, after Hermès chief Jean-Louis Dumas met actress Jane Birkin on a flight and talked about her need for a better travel bag.

Each Birkin is made by a single craftsperson, and Hermès limits supply. Buyers usually have to build a purchase history with a boutique before being offered one, and resale prices often exceed retail.

Fighting off LVMH

Around 2010 LVMH revealed it had quietly built a large stake in Hermès. The family pooled its shares in a holding company to keep control. After a long fight and a French regulator’s fine against LVMH, the group distributed its Hermès shares to its own shareholders in 2014.

Hermès is publicly listed, but descendants of Thierry Hermès still hold a majority. Its stock market value has made it one of the most valuable luxury companies in the world.