PARIS — Never mind runways, the French fashion scene has a new hot spot: the courtroom.
On Wednesday, Hermès International confirmed it has filed another lawsuit against LVMH Moët Hennessy Louis Vuitton, escalating its standoff with the luxury giant, which is its largest nonfamily shareholder.
The complaint, filed with the commercial court here, aims to annul the equity swaps that allowed LVMH to acquire its initial 12 percent stake in Hermès using a series of complex financial instruments in accumulations below mandatory disclosure thresholds for public companies.
LVMH has subsequently increased its holding to 22.6 percent. An Hermès spokeswoman noted that it is not contesting share purchases from the free float.
But the group controlled by business titan Bernard Arnault has repeatedly charged Hermès with trying to sway an investigation by France’s stock market watchdog, the Autorité des Marchés Financiers, which earlier this month recommended LVMH be fined 10 million euros, or $13.3 million at current exchange.
“For more than two years, one of [Hermès’] executives has been waging a campaign of denigration and slander against LVMH that is extremely detrimental to LVMH’s image and reputation,” LVMH vice president Pierre Godé told the AMF’s sanctions committee earlier this month, reiterating vehement denials that it breached market rules.
The company is accused of dissimulating its gradual acquisition of Hermès stock via cash-settled equity swaps between 2001 and 2010.
The AMF, which launched its probe in November 2010, is expected to deliver its final decision no later than July 31.
LVMH-Hermès isn’t the only legal battle in town, though. France’s other major fashion group, Kering, is involved in a lawsuit of its own.
A first hearing is expected in September or October at the Tribunal de Grande Instance here pitting Balenciaga against its former creative director, Nicolas Ghesquière, who exited last November.
Officials at the civil court declined to discuss the particulars of the case, as only the lawyers involved are privy to them. However, it is understood Balenciaga is taking action against its former designer for remarks made in an interview he granted to upstart European fashion magazine System.
In France, freedom of expression is limited in instances where an employee or former employee besmirches or potentially imperils an enterprise, allowing them to seek damages.
At the upcoming hearing, each party would have to at least be represented by an attorney, who would meet before a judge, explained Pierre Warin, a counsel with August & Debouzy in Paris. He is not involved in the specific case.
Speaking in general terms, Warin told WWD it’s difficult to predict when a judgment might be handed down, since that can vary widely from case to case, as can the level of damages awarded, if there are any.
In the System interview, splashed over 32 pages, Ghesquière said that “there was no one helping me on the business side” and “I began to feel as though I was being sucked dry, like they wanted to steal my identity while trying to homogenize things.”
Balenciaga had no comment Wednesday. Ghesquière could not be reached for comment.
The number of cases in the Hermès-LVMH case has been multiplying.
Earlier this month, LVMH filed civil charges against an unidentified manager at Hermès, believed to be chief executive officer Patrick Thomas, who alleged during the company’s annual meeting that LVMH had built up its stake in Hermès in a “fraudulent” way.
Hermès filed a criminal complaint against LVMH last September, accusing it of insider trading, manipulating share prices and dissimulating its investment in the company.
LVMH in turn filed a suit against Hermès for slander, blackmail and unfair competition.
It is understood the commercial court will await the finding of the criminal complaint before turning to its case.
Hermès executives have repeatedly urged LVMH to reduce its shareholding, while LVMH insists it only has peaceful intentions and wishes to cooperate with the family-controlled maker of Birkin bags and silk scarves.
Last year, Hermès grouped family-owned shares into a nonlisted holding company to gird it against further advances by LVMH.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye