Hermes in ‘league of their own’ as family gets $5 billion payout

A Hermes Birkin bag. Bloomberg

The French family behind Hermes International SCA is on track to pocket more than $5 billion in dividends for a series of four record-breaking years, when the maker of pricey leather handbags and silk scarves rode an industry boom and is now defying a slump.

Some 100 heirs to the luxury fortune, who control just over two thirds of Hermes shares, have benefited from rapidly rising payouts including this year’s biggest ever. The company reported a jump in fourth-quarter revenue while rivals LVMH Moët Hennessy Louis Vuitton SE and Gucci-owner Kering SA recorded declines.

The Hermes family’s wealth is estimated at $213.8 billion, according to the Bloomberg Billionaires Index, derived from the Paris-listed company whose stock price has more than tripled since the start of 2021, when pandemic lockdowns around the world began driving a surge in luxury shopping. Hermes market capitalization briefly touched €300 billion ($313 billion) after 2024 results were announced Feb. 14.

While the clan is Europe’s richest, and Hermes has been described as being “in a league of their own” in the luxury sector, LVMH founder Bernard Arnault, 75, remains the richest individual in France, with a fortune of $196.2 billion, according to Bloomberg’s wealth index.

The windfall for the descendants of harness maker Thierry Hermes, who started a workshop in 1837, comes more than a decade after they nearly lost control of the company to Arnault, who had stealthily accumulated a stake through LVMH. It also coincides with moves to diversify some of their expanding wealth away from luxury through family office Krefeld Invest.

Worker Bonus

Hermes intends to pay a dividend of €26 a share for last year — its largest ever — which includes an exceptional cash payout of €10 a share. The plan still needs to be approved by shareholders at an annual meeting April 30. It would be an increase from the previous year’s dividend of €25 a share — which also included an extra €10 a share — and twice the level paid out for 2022, which itself was nearly two thirds more than the previous year.

Before the pandemic, the company periodically disbursed special cash dividends of €5 a share, but as revenue has hit records every year, shareholders and employees are benefiting. The company announced a €4,500 bonus for all workers related to last year’s results.

Taking into account the family members’ stake in the company, their total payout for the past four financial years will amount to €5.1 billion. Even after distributing €2.6 billion to shareholders last year, Hermes International’s net cash position was €12 billion at the end of December, according to the latest earnings statement.

Asked during the results presentation whether the company would consider using its cash to acquire another brand, Executive Chairman Axel Dumas said, “I can never say never, but it’s not our priority.”

Dumas, 54, a sixth-generation scion who comes from one of three branches of the family, added, “We know how to do Hermes, but I’m not sure we would know how to do something else.”

What remains unclear is who may be benefiting from the dividends stemming from about 6 million shares, now worth roughly €17 billion, that were linked to Nicolas Puech, Dumas’ octogenarian relative based in Switzerland. Puech has been embroiled in a legal case over management of his wealth and contends this part of his fortune has disappeared.