Hermès Believes Heir No Longer Holds Stock Worth €14 Billion

(Bloomberg) — The enigma surrounding Hermès shares worth about €14 billion ($16.2 billion) inherited by a member of the luxury goods company’s controlling family is finally seeing some glimmers of light.

Hermès International SCA believes the family member, Nicolas Puech, hasn’t had the shares in the Birkin bag maker for a while, Executive Chairman Axel Dumas said Wednesday, adding that he doesn’t think the holding can ever be recovered.

“I’ve had the certainty for a long time that Nicolas Puech no longer holds his shares,” Dumas told reporters on an earnings call in his most elaborate public comments on the issue. “This is why we’ve started legal proceedings.”

The comments add a new twist to protracted legal battles over the shares’ whereabouts, which were further complicated by the death last week of Puech’s former wealth manager.

The dispute over Puech’s stake in Hermès has been among the most enduring mysteries in the fallout from one of France’s most high-profile corporate battles. More than a decade ago Bernard Arnault, luxury goods rival and founder of conglomerate LVMH Moët Hennessy Louis Vuitton SE, revealed he had stealthily amassed a stake in Hermès. Descendants controlling Hermès came together and successfully fought the unwelcome advance.

The fate of Puech’s shares was never clarified even after Arnault’s 2014 agreement with the Hermès clan to start unwinding LVMH’s 23% stake. The puzzle deepened in 2023, when Puech accused his former wealth adviser Eric Freymond of mishandling his holdings. Freymond died in Switzerland last week.

The relationship between Puech, an 82-year-old fifth generation heir, and Freymond had soured, leading to a court case in Geneva over the fortune, which was mostly tied to some 6 million shares in Hermès, one of the world’s most valuable luxury goods companies. Puech alleged Freymond played a role in the disappearance of his fortune.

A 2024 decision by an appeals court in Geneva found no evidence that Freymond mismanaged Puech’s fortune or that the reclusive Puech was duped over an extensive period during which at least some of the stock was sold. Freymond denied all allegations of wrongdoing.

During the earnings call, Dumas described Freymond’s death as “tragic” and “sad.”

Freymond’s Testimony

Also on Wednesday, French newspaper Le Canard Enchaine published a report saying Freymond gave testimony earlier this month before two Paris judges about the shares. Freymond alleged that with the full knowledge of Puech, he had helped facilitate the sale of the stock to LVMH, in part through the adviser’s wealth management company Semper Gestion SA.

Over a number of years through 2008, Freymond also alleged that he and Puech met with Arnault 14 times in Paris, Spain and at LVMH’s prestigious vineyard Chateau d’Yquem, according to the report. Puech was an active proponent of closer ties between LVMH and Hermès because of the possibility he could play a significant role in the new structure, the report cited Freymond as saying.

Also Read: Hermès Falls as Valuation Woes Eclipse Birkin Maker’s Sales Gain

The Paris prosecutor’s office declined to comment, citing confidentiality rules. LVMH didn’t immediately respond to requests for comment. The luxury group was cited in Le Canard as saying that the testimony was “totally inaccurate.” It also said it now doesn’t hold any Hermès shares. A representative for Puech declined to comment on the report.

In a statement on Monday, Puech said Freymond had been an adviser and friend for a quarter century to whom he had entrusted the management of his affairs.

“Unfortunately our relations broke down due to extremely serious factors related to my 6 million shares in Hermès International on which light needs to be shed,” Puech said, calling for justice to prevail to establish the truth. “This concerns my entire fortune including my primary residence in Switzerland.”

Representatives for Freymond didn’t respond to requests for comment on the report, but following his death, lawyers Francois Zimeray and Jessica Finelle said he had been “broken” by the “suspicion and betrayal.”

Lawsuits and investigations related to the shares have spanned France, Switzerland and Washington DC, with the Geneva court ruling providing details about Freymond’s mandate with Puech and the trading and transfer of some of the heir’s Hermès shares.

“The ‘gigantic fraud’ to which he was victim was undetectable to common mortals,” the court document read, adding that Puech’s allegations lacked clarity and were insufficiently backed up.

The Hermès clan, which counts more than 100 members, is one of Europe’s richest families. The size of the stake inherited by Switzerland-based Puech, who has no children, would constitute the largest holding of an individual in the purveyor of handbags and colorful silk scarves that was founded in 1837.

Hermès head Dumas is a sixth generation descendant of the founder. His late uncle Jean-Louis Dumas, who once led Hermès, was Puech’s cousin.

(Updates to add response from the Paris prosecutor’s office. Also streamlines second paragraph.)

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