Hermès, every mention
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every year anyone David Rosenthal 277Ben Gilbert 261Charlie Munger 4
Verbatim, from the transcripts: the passages where Hermès comes up
Ferrari: What happens when you staple a luxury brand to a sports team? (Audio) · Acquired
- ▶ 3:14 Ben Gilbert There are 10 times more Birkin and Kelly bags made each year over at Hermes than there are Ferraris.
- ▶ 1:00:20 David Rosenthal It's probably also worth a quick moment here to talk about the sort of Italian nature of beauty and luxury versus the French nature of beauty and luxury that we've covered on Hermes or LVMH.
- ▶ 1:02:12 David Rosenthal Like, who are the designers at Hermes?
- ▶ 1:02:15 David Rosenthal If you really know the house, if you really know Hermes, you probably know who the designers are, but for most Hermes clients, it's just like, oh, this is Hermes.
- ▶ 1:59:26 David Rosenthal But you couldn't talk to Enzo about how Hermes was managing its business, you know.
- ▶ 2:03:29 David Rosenthal If we were talking about Louis Vuitton or Hermes or Patek Philippe or Rolex, this would be all bad.
- ▶ 2:04:34 David Rosenthal Hermes doesn't have a couple hundred million teenage girls around the globe that have posters of Birkins on their walls that they have to please.
- ▶ 2:04:41 Ben Gilbert Ferrari is Hermes and Manchester United smashed together.
- ▶ 2:10:48 David Rosenthal The other luxury companies as Hermes.
- ▶ 2:10:51 David Rosenthal You know, you think Hermes is investing in efficiencies in their factories?
- ▶ 3:14:27 David Rosenthal By and large, at least with the current slash older generation, car guys are very different than like, you know, Hermes collectors or, you know, LV fans or,
- ▶ 3:20:06 Ben Gilbert So when you look at companies that don't have to do that, LVMH is 66% and Hermes is 71%.
- ▶ 3:24:02 Ben Gilbert And until the luxury slump where LVMH and Hermes and all these other companies got hit too in the last couple of years, it was trading around 50 X for their last few years.
- ▶ 3:24:12 Ben Gilbert Now, for reference, most automakers trade at eight to 10 X, and Hermes trades at 35 to 60 X, again, big swing the last few years, and LVMH sort of around 25 X.
- ▶ 3:32:16 David Rosenthal On the other hand, I think it's not quite as powerful in terms of driving profit margins for a Ferrari as it is for, say, a LVMH or an Hermes.
- ▶ 3:38:22 Ben Gilbert You and I have always talked about it as a Costco in the front and Hermes in the back.
- ▶ 3:49:16 Ben Gilbert Is it a member of the Hermes family?
- ▶ 3:58:12 Ben Gilbert If you liked this episode, go check out our episodes on Porsche, Rolex, Hermes, and LVMH.
Formula 1: Fast cars, celebrities, and B2B software (Audio) · Acquired
- ▶ 18:48 David Rosenthal There's another very different founding pillar number two of F-One taking place in Monaco, which is that in 1956, the sovereign Prince Rainier III of Monaco, as we talked about at great length in our Hermes episode, married the American…
- ▶ 24:33 David Rosenthal And so, just like the equestrian heritage kind of serves as the, like, legitimizing soul of Hermes, motor racing in F-One serves as the legitimizing soul of Ferrari.
10 Years of Acquired (with Michael Lewis) · Acquired
- ▶ 16:02 Ben Gilbert Like my, in calling out Hermes, it's because I think quality and scarcity have become an important part of acquired.
- ▶ 16:09 Ben Gilbert And in some ways we like learned that from Hermes, but we covered Hermes last year.
- ▶ 16:33 Ben Gilbert Yeah, and at some point we kind of looked at each other and we were like, maybe if we just admit that we are heavily constrained, and then try to just lean into that constraint in the way that Hermes leans into every single Birkin bag must…
- ▶ 54:08 David Rosenthal Whereas if you look at our, um, Costco episode, which is now two and a half years old, or, um, LVMH, Hermes, Rolex, like they just, they just keep going.
- ▶ 2:46:11 Ben Gilbert Listeners, if you like this episode, go check out our episodes on TSMC, Hermes, Costco, the NFL, Berkshire, or any other episode that we talked about.
Coca-Cola: The Complete History & Strategy (Audio) · Acquired
- ▶ 3:44:20 David Rosenthal Hermes is always Hermes, but it's always whimsical.
Google Part I: Origins of Search. How the Best Business in Human History Happened (Audio) · Acquired
- ▶ 3:29:37 David Rosenthal I think it's weak branding power though, because that's not a branding power like Hermes has branding power.
Rolex (Audio) · Acquired
- ▶ 3:05 David Rosenthal Hermes doesn't sell a million Birkins every year.
- ▶ 7:19 David Rosenthal One, because it's sort of a fun story and, uh, calls back to our Hermes and LVMH episodes, and it's gonna call back very directly to those episodes in a minute here.
- ▶ 8:24 Ben Gilbert Louis Vuitton and Hermes.
- ▶ 8:58 David Rosenthal These brands, I mean, much less so Rolex, but Hermes, LVMH are so steeped in this European history and the tradition of the nobility, but it's actually these orphaned outsiders that founded them.
- ▶ 3:03:11 David Rosenthal I wear my Hermes band on my Apple watch.
- ▶ 3:28:12 David Rosenthal To me, that's what Hermes does better than anybody else out there.
- ▶ 3:28:15 David Rosenthal They manage the market.
- ▶ 3:28:17 Ben Gilbert They're in control.
- ▶ 3:28:18 David Rosenthal They're in control.
- ▶ 3:29:09 David Rosenthal You know, you get a Birkin for, I don't know, 12,015 thousand dollars, like, I mean, it's an insane amount of money, but relative to what they could charge or what the secondary market prices are.
- ▶ 3:32:22 David Rosenthal Yeah, and this also starts to build into the lore, you know, just like Hermes has,
- ▶ 3:39:33 David Rosenthal There is this really awesome New York Times article in the last couple months talking about this dynamic, how all the other luxury houses over the past couple years, you know, during the post-COVID craziness, really raised prices, and…
- ▶ 3:40:46 David Rosenthal Very different in their strategy versus, uh, Hermes or other luxury companies is they don't control the last mile of retail and the customer relationship.
- ▶ 3:41:08 David Rosenthal In a way that Hermes or Louis Vuitton or Chanel or the like, they're managing their own customer relationships.
- ▶ 3:41:23 David Rosenthal This works so well for LVMH and Hermes and et cetera, et cetera.
- ▶ 3:41:37 David Rosenthal Hermes can have their own stores because they sell furniture and they sell ready to wear and they sell jewelry and they sell handbags.
- ▶ 3:46:45 David Rosenthal You're just going there to sign up for, you know, a, a wait list, which again is a very different experience than the Hermes retail experience.
- ▶ 4:12:30 Ben Gilbert It's quite tempting to say that Rolex is Louis Vuitton and that Patek is Hermes, but Rolex isn't quite Louis Vuitton.
- ▶ 4:14:28 Ben Gilbert Hermes doesn't do this.
- ▶ 4:22:58 Ben Gilbert There's maybe two with Porsche and Hermes, but I think you're right, that's Hermes.
- ▶ 4:23:06 Ben Gilbert Porsche trades at 15 X earnings, Hermes trades at 60 X earnings.
- ▶ 4:23:11 Ben Gilbert And my best estimates on Rolex's growth rate is actually in the same neighborhood as Hermes' growth rate, and Hermes' margin profile is also pretty similar to a forty-ish percent operating margin.
- ▶ 4:23:26 Ben Gilbert I actually think if growth rate's close, and if the operating margin's close, and if it's a single premium brand that's the best in the sector is the same, you totally could value it at what Hermes is valued at.
- ▶ 4:25:04 David Rosenthal Yeah, I mean, again, Hermes has a two hundred and ninety two billion euro market cap, and depending on what the assets are within Rolex, yeah.
- ▶ 4:35:06 Ben Gilbert You look at Hermes, and you're like, oh, all of the fun that you're having is the same sort of fun.
- ▶ 4:59:41 Ben Gilbert If you like this episode, go check out LVMH, Hermes, or Porsche by searching in any podcast player.
Mars Inc. - The Chocolate Story (Audio) · Acquired
- ▶ 25:58 Ben Gilbert It's in the same way that Hermes, the Birkin bag, was a bag for baby bottles.
- ▶ 2:38:01 David Rosenthal And it's not like, you know, I mean, Hermes doesn't have a marketing department.
- ▶ 3:44:53 David Rosenthal The artwork, the design, the presentation, it's like, this is if Hermes made an advent calendar.
IKEA (Audio) · Acquired
- ▶ 2:40:07 Ben Gilbert Hermes is a pretty good, I mean, it's been around twice as long.
- ▶ 2:45:05 David Rosenthal I should remember this from our Hermes episode.
- ▶ 2:45:08 David Rosenthal Do they report
- ▶ 2:45:27 David Rosenthal We've spent a lot of time in Hermes stores recently.
- ▶ 2:45:36 Ben Gilbert You're raising their price per foot.
- ▶ 2:45:38 David Rosenthal No, I think I'm lowering their price per foot.
- ▶ 3:03:11 David Rosenthal Hermes and Ikea separated at birth.
- ▶ 3:03:17 Ben Gilbert For listeners that haven't listened to LVMH and Hermes episodes, this borrows from the luxury playbook.
- ▶ 3:13:54 Ben Gilbert And I will tell you, like, for some reason, I'm just, like, not as fired up about it as compared to a Costco or an Hermes.
- ▶ 3:21:21 David Rosenthal Or Hermes.
- ▶ 3:21:22 Ben Gilbert Or Hermes.
Acquired LIVE from Chase Center (with Daniel Ek, Emily Chang, Jensen Huang and Mark Zuckerberg) · Acquired
- ▶ 20:26 Ben Gilbert It's an absolute crime that we did four hours on the entire multi-hundred year history of Hermes, and it was just audio.
- ▶ 2:22:51 Ben Gilbert Thank you to Mark and the entire meta executive team that we got to talk to to prep for this, Daniel and the Spotify team, uh, Emily and Lauren from Bloomberg and the Circuit, Jensen, Mylene, uh, Janine, everyone from the whole NVIDIA…
- ▶ 2:23:05 David Rosenthal Thank you, Hermes.
The Mark Zuckerberg Interview · Acquired
- ▶ 1:26:20 David Rosenthal Thank you to Hermes for dressing us, which was my favorite Easter egg of the night.
Starbucks (with Howard Schultz) · Acquired
- ▶ 1:29:38 David Rosenthal This would be like a, uh, American luxury leather goods company coming in and competing with Hermes.
Microsoft Volume I: The Complete History and Strategy of founding through Windows 95 (Audio) · Acquired
- ▶ 5:15 Ben Gilbert New York Times, Hermes, where it was sort of passed to the son-in-law to continue to run the business.
- ▶ 41:04 Ben Gilbert Like Hermes, durability and reliability are paramount for building hundred-year companies that can reinvent
- ▶ 4:22:27 David Rosenthal And if you're not at all interested in technology or software, but have somehow managed to get through all these hours with us, go listen to our LVMH and Hermes episodes, even if you do love technology and software, which obviously you do…
Renaissance Technologies (Audio) · Acquired
- ▶ 4:12 Ben Gilbert For example, we had a listener, Nicholas Cullen, email us this time, who found the actual document with the bylaws of Hermes's controlling family shareholder, H-fifty-one, which we linked to in this most recent email.
- ▶ 1:00:19 David Rosenthal And on Hermes, we told the story of how current CEO Bill McDermott came in and turbocharged that into an absolute monster, hundred and fifty billion market cap global behemoth.
- ▶ 1:06:53 Ben Gilbert And David, in a very crude way, calls back to last episode on Hermes.
- ▶ 2:04:24 David Rosenthal Number one, there's like the Hermes Atelier workshop benefit.
- ▶ 2:56:45 Ben Gilbert You know, they're the, uh, Hermes Apple Watch strap in David's parlance.
- ▶ 3:05:06 David Rosenthal We had just recorded the Hermes episode, and oh man, I was so pleased to be there.
Hermès (Audio) · Acquired
- ▶ 0:02 Ben Gilbert Hermes is reporting earnings in like two days.
- ▶ 0:12 Ben Gilbert And then I realized this is Hermes.
- ▶ 0:18 David Rosenthal Also, the Hermes annual reports are the most beautiful annual reports ever created in the history of the financialization of mankind.
- ▶ 1:46 Ben Gilbert This company dates back to 1837 in Paris, France, the crown jewel of the luxury industry, Hermes.
- ▶ 2:24 Ben Gilbert And it was in that episode that I feel like I got a real penchant for everything that Hermes stood for.
- ▶ 2:29 Ben Gilbert You know, after a 187 years, still under family control, they're on their sixth generation of family leadership at the helm.
- ▶ 2:36 Ben Gilbert I don't know, David, everything Hermes does is just so focused and intentional and pure.
- ▶ 2:43 Ben Gilbert As much as they sort of get lumped together with brands owned by LVMH, they are in many ways the anti-LVMH.
- ▶ 2:55 David Rosenthal But, after our LVMH episode, I mean, you were so inspired by learning about Hermes, you went out and you bought your first luxury object, right?
- ▶ 3:06 Ben Gilbert My wife and I were on our honeymoon listeners after LVMH, so last summer, and we were in Exxon Provence, and we walked by an Hermes store, and I thought this would be a great time to go in and get each other something.
- ▶ 4:57 David Rosenthal You know, as we've been talking about, the land of beauty, luxury, enlightenment, where Hermes, of course, was founded and is still based today.
- ▶ 5:05 David Rosenthal And uniquely, Hermes still does 85% of their production by hand by Mastercraft's people in France, as we will talk a lot about.
- ▶ 5:43 Ben Gilbert So Hermes, is that a German name?
- ▶ 5:47 David Rosenthal Hermes is obviously not a German name.
- ▶ 6:39 David Rosenthal Now, this Napoleonic conquest was at the same time both the very best thing that could happen to young Thierry, I mean, it leads directly to Hermes, but
- ▶ 6:51 David Rosenthal Also the very worst and truly worst, you know, all this conquering, this glory of France that we're going to talk about becomes important to Hermes.
- ▶ 9:56 David Rosenthal Now, it's kind of unclear to me at this point if he's using the famous saddle stitch, which becomes so important to Hermes, and the reason it's unclear to me is because he's not making saddles.
- ▶ 12:36 David Rosenthal And this is super important for Thierry and Hermes for two reasons.
- ▶ 14:16 David Rosenthal Before all this, before this era, there's no way that this evolves into Hermes, or honestly that Louis Vuitton and what he's doing with luggage and with trunks, there's no way that that evolves into Louis Vuitton.
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