Thierry Hermès was the sixth child of an innkeeper who went to Paris as an orphan, proved gifted in leatherwork, and opened a small harness workshop in 1837. From that humble beginning, he and his descendants built a luxury empire that has survived world wars, multiple French regime changes, and the age of globalisation.
Over six generations, Hermès has grown from crafting saddles for European royalty to shaping modern luxury itself. Each generation has added innovation without breaking the thread: Émile-Maurice Hermès patented the zipper in France; Robert and Jean-Louis Dumas expanded into ready-to-wear and leather goods; today, Axel Dumas, the sixth-generation CEO, presides over a €250 billion house that still makes every Birkin bag by hand.
The family’s secret is structural as much as stylistic. Its governance is built like its leather goods: tightly stitched, meticulously refined, and designed to last.
The “Fort Knox” of Family Governance
Hermès operates as a Commandite par Actions — a limited partnership that keeps control with managing partners, all family members, while public investors hold non-voting shares. Analysts call it the “Fort Knox” of corporate governance — a nod to the brand’s own ultra-secure crocodile-skin atelier, once described by journalists as “a veritable Fort Knox.”
Like that vault of exotic leathers, the company’s ownership structure is built for protection. A 75% supermajority is required to alter statutes or replace leadership, making a hostile takeover virtually impossible. This fortress has served its purpose well: it kept Bernard Arnault’s LVMH at bay during the so-called “handbag wars.”
The Handbag Wars and the Price of Unity
It began in 2010, when Bernard Arnault, head of the luxury conglomerate LVMH and already the world’s richest man, quietly accumulated a 17% stake in Hermès through a series of complex equity swaps. The Hermès heirs saw the move as an invasion of privacy as much as a financial threat. In response, the family closed ranks, forming the H51 holding to bind their shares and guarantee independence for decades. When the dust settled, LVMH agreed to reduce its stake, and Hermès emerged stronger.
But what protects also confines. The Hermès model rewards loyalty and punishes deviation. It is brilliant at preserving continuity, less so at welcoming dissent. Dissenters don’t destabilise the system; they simply disappear from it.
One member refused to join the holding: Nicolas Puech, a fifth-generation heir. Feeling besieged by relatives and critical of the company’s direction, he resigned from the board and kept his 5.7% stake outside the family compact. From the family’s view, this confirmed the wisdom of the system: control should remain with those who embody its ethos. From Puech’s view, it confirmed his exile.
The Heir Who Walked Away
Puech’s detachment turned into full estrangement. Living reclusively in Switzerland, he became the rare Hermès heir known not for style but for scandal. In 2023, he announced plans to adopt his Moroccan gardener and leave him half his fortune — despite a 2011 inheritance contract assigning his estate to the Isocrates Foundation, a philanthropic entity he had created.
The foundation rejected his attempt to revoke the pact, setting off a legal battle worth billions. Meanwhile, Puech claimed that his Hermès shares — worth roughly $13 billion — had “vanished,” alleging fraud by his longtime Swiss wealth manager, Eric Freymond.
The heart of the issue lies in how those assets were held. Unlike the registered shares owned by the rest of the family, most of Puech’s were bearer shares — certificates with no registered owner, making them virtually untraceable. According to Puech, the roughly six million shares representing 5–6% of Hermès were transferred or sold without his knowledge over a period spanning two decades.
Swiss courts rejected his fraud claim in 2024, noting that he had granted Freymond broad powers of attorney. Still, the whereabouts of the shares remain unclear. Hermès Executive Chairman — and distant relative — Axel Dumas stated publicly that the company has “had the certainty for a long time that Nicolas Puech no longer holds his shares” and that it has initiated legal proceedings to clarify the situation.
Whether through misplaced trust, poor oversight, or deliberate concealment, the episode has left an indelible mark on a dynasty famed for order.
A New Peak of Power
While one heir unravelled, the rest of the family tightened the weave. In 2022, several branches launched Krefeld Invest, a new multi-family office consolidating their private fortunes. The goal: to coordinate investments across branches, maintain discipline, and reduce the temptation to sell Hermès shares.
It’s an evolution of the LVMH defence playbook: family unity translated into institutional wealth management. Recent reports (late 2025) place the company’s market capitalisation at well over $250 billion, and at one point, it briefly surpassed LVMH as the world’s most valuable luxury group. The family’s defensive governance has become the foundation of its financial ascendancy.
A Philosophy Woven into Governance
Hermès’s success is strongly tied to its philosophy. The company famously avoids celebrity endorsements, limits production growth to about 7% a year, and invests heavily in training artisans at its École Hermès des savoir-faire. Its strategy is slow, deliberate, and defiantly anti-marketing.
This approach is the mirror of its governance: conservative, precise, and immune to noise. Both are designed to endure, not to chase trends. “Luxury,” as Axel Dumas likes to say, “is that which can be repaired.” So is Hermès.
The Four Abundances: A Holistic View
Let’s see how the four dimensions of abundance are represented in the Hermès family:
- Wealth: Preserved through fortress governance and the creation of unified family offices such as Krefeld Invest. The structure keeps the fortune intact, but it also concentrates decision-making in a small circle. For outsiders, access to wealth became abstract: it existed on paper, not in practice.
- Relationships: Strong inside the circle, brittle at the edges. The family’s solidarity has been institutionalised, but dissenting voices have little space for dialogue. The exclusion of one heir may protect stability, yet it erodes unity.
- Time: Managed with discipline: one workshop at a time, one heir at a time. Hermès excels at the long view, but its 20-year share lock-ins and multigenerational pacts show how patience can also become paralysis if renewal isn’t built in.
- Purpose: Craft as identity, continuity as creed. Yet philanthropy and personal conviction expose fault lines between collective and individual meaning. The conflict between Nicolas Puech and his own foundation shows what happens when purpose isn’t co-created but predefined.
The Hermès model achieves extraordinary continuity, but continuity alone cannot guarantee cohesion. The Four Abundances remain in balance only when wealth serves relationships, time allows renewal, and purpose includes every voice.
The Family Council Canvas in Action
If Hermès had used a framework for reflection beyond legal structure, like the Family Council Canvas, its unity might have evolved more gracefully. The FCC offers a space where strategy meets intimate conversation.
- Dynamics: It would have given the family a forum to surface emotional distance early, recognising the quiet withdrawal of members like Nicolas Puech before it became estrangement.
- Compass: It could have balanced preservation with autonomy, clarifying how individual heirs express independence without threatening the collective mission.
- Journey: By documenting each generation’s personal purpose alongside the family’s shared vision, it would have kept legacy alive as a living narrative, not a fixed inheritance.
- Goals & Actions: Regular review points could have helped adjust structures every few years instead of every few decades.
Had the Hermès family used the FCC, dissent might have found form instead of fracture.
Lessons for Advisors and Families
Structure cannot replace conversation.
Hermès shows that even the most elegant architecture of control can’t substitute for open dialogue. Governance may preserve assets, but only communication preserves relationships. A family that never needs to talk about succession often ends up talking about it in court.
Unity is strongest when it allows differences.
The family’s long-term success rests on collective discipline, yet the Puech dispute proves that unity without inclusion is brittle. Real cohesion isn’t uniformity; it’s the ability to integrate individuality without fear. Advisors should help families design spaces where disagreement is not a threat, but a function of trust.
Wealth without voice invites rebellion.
When family members feel economically bound but emotionally voiceless, wealth becomes a form of quiet coercion. Giving heirs agency — through purpose, philanthropy, or decision-making roles — transforms inheritance from obligation into belonging.
Defensive governance must evolve into reflective governance.
Structures built to defend the past must eventually learn to listen to the present. The same tools that protect a legacy can stifle it if they never adapt. Families that institutionalise review and reflection — through councils, facilitated dialogue, or periodic charter updates — keep their governance alive.
Conclusion
Hermès remains the textbook example of family governance done right: heritage institutionalised, creativity contained, value protected. Yet the story of Nicolas Puech shows the other side of perfection: when protection hardens into exclusion. The Hermès dynasty has built a fortress that successfully deters enemies. The question for future generations is whether they can keep their doors open for friends. In the end, the art of succession is not about keeping the house intact, but keeping its people connected.
Disclaimer: This article is a case study based on publicly available information and is intended for educational and informational purposes only. The analysis and opinions expressed are those of the author and do not constitute factual claims about the private lives or intentions of the individuals discussed. The use of any copyrighted material is done for the purposes of commentary and criticism and is believed to fall under the principles of fair use. All images are used with attribution to their known sources.
Sources:
Hermès International. Universal Registration Document 2024. Published 2025. https://assets-finance.hermes.com/s3fs-public/node/pdf_file/2025-05/1746455904/250328_hermes_urd2024_en.pdf?VersionId=3KSKNESQ91kB1oWe_WcbGAPH7Ok0q7MG
Roll, Martin. “Hermès: The Strategy Behind the Global Luxury Success.” Martin Roll Business & Brand Strategy. Accessed November 2025. https://martinroll.com/resources/articles/strategy/hermes-the-strategy-behind-the-global-luxury-success/
Fashion United. “Hermès CEO’s long-held conviction regarding missing shares of an heir.” Published July 30, 2025. https://fashionunited.com/news/people/hermes-ceos-long-held-conviction-regarding-missing-shares-of-an-heir/2025073067413
The Guardian. “Hermès billionaire plans to leave half of fortune to ex-gardener and cut ties with charity.” Published December 19, 2023. https://www.theguardian.com/fashion/2023/dec/19/hermes-billionaire-plans-to-leave-half-of-fortune-to-ex-gardener-and-cut-ties-with-charity
All About Estates. “Cultivating More Than Just a Green Thumb: The Hermès Gardener’s Extraordinary Fortune.” Published April 2024. https://www.allaboutestates.ca/cultivating-more-than-just-a-green-thumb-the-hermes-gardeners-extraordinary-fortune/
Insurance Journal. “Hermes Family in Talks to Invest in French Insurer Albingia.” Published December 12, 2024. https://www.insurancejournal.com/news/international/2024/12/12/804525.htm
Visual: Moonik – Hermès Store at Avenue George V in Paris 8th arrondissement, Briton Riviere
