PARIS — In a move that could calm tensions between luxury rivals, LVMH Moët Hennessy Louis Vuitton said Tuesday it would not appeal a June 25 decision by France’s stock market regulator that imposed sanctions over the way the luxury conglomerate acquired its initial 17.1 percent stake in Hermès International.
The AMF had ordered LVMH to pay 8 million euros, or $10.6 million at current exchange, the largest fine it has ever imposed.
In a statement released after the close of trading in France, LVMH said it would be justified in appealing the AMF decision, noting it never breached regulations regarding ownership thresholds or engaged in insider trading or market manipulation. RELATED CONTENT: LVMH Raises Hermès Stake Again >>
“However, the interests of LVMH’s shareholders go beyond the defense of these legal principles,” the company said. “Instead, LVMH must also consider the time and cost of further proceedings and the fact that such proceedings would interfere with the sound management of LVMH’s investment in Hermès.”
According to sources, LVMH has already realized a potential capital gain of about 3.5 billion euros, or $4.62 billion, with its investment in Hermès shares.
Hermès executives have repeatedly urged LVMH to reduce its shareholding, and constructed defenses against a full takeover of the family-controlled firm.
Nevertheless, LVMH raised its stake in the maker of Birkin bags and silk scarves to 23.1 percent as of June 30, from 22.6 percent as of Dec. 30, 2012, characterizing its latest investment as an opportunistic move.
LVMH surprised markets in October 2010, revealing it had amassed a large stake in Hermès via cash-settled equity swaps that allowed it to circumvent the usual regulations requiring firms to declare share purchases.
The AMF maintained that LVMH should have made public the transaction it was preparing on June 21, 2010, the date of a phone call between one of its employees and a financial institution allegedly discussing the implications of the potentially growing stake, should the equity swaps be converted into Hermès shares. LVMH informed the AMF in October of that year.
On Tuesday, LVMH noted it would continue to defend itself against the “baseless legal proceedings being pursued by Hermès management to recover compensation for the serious harm their actions have caused.”
A spokeswoman for Hermès declined to comment on Tuesday’s developments.
It is understood Hermès has pending penal and civil suits against LVMH.
Meanwhile, in June, LVMH filed civil charges against an unidentified manager at Hermès, believed to be co-chief executive officer Patrick Thomas, for accusing LVMH of building its stake in Hermès in a “fraudulent” way.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast