LVMH Buys A Big Chunk–$2 Billion–of Hermes!!!

The world’s two most powerful luxury brands are getting a bit chummier.

My WWD idol, European editor Miles Socha, reports that LVMH has taken a 14.2% stake in Hermes International. The stake is worth about $2 billion.

Hermes is a public company, but the family behind the brand still owns a controlling stake. (Their share is 71%, to be exact.) LVMH will announce on Monday that they’ve invested in Hermes to “be a long-term shareholder of Hermès and to contribute to the preservation of the family and French attributes which are at the heart of the global success of this iconic brand.”

Does this mean they’re going to try and buy all of Hermes? Probably in the future, but not at the moment.

Hermes is to luxury as Apple is to gadgets. It’s the crown jewel. From the simple Twilly scarf to the coveted Birkin, it’s the ultimate acquisition for the luxury–and fashion–consumer. The company, which also owns high-end cobbler John Lobb, was barely touched by the recession. And its stock has jumped more than 88% over the last year.

For LVMH, Hermes would make them untouchable. (Louis Vuitton already does a good job of that, but nothing competitors PPR or Richemont could offer up will ever come near Hermes in terms of quality, heritage, and overall desirability.)

At this stage in the game, the Hermes family still holds the cards. Will they swiftly buckle to LVMH? Or will this be the lock-down, drag-out, luxury battle of the decade? (We’re kind of hoping for the latter.)