Hermès

**Ben Gilbert** (0:00)
So, I don't know if you realize this, Hermès is reporting earnings in like two days.

**David Rosenthal** (0:05)
Yes.

**Ben Gilbert** (0:05)
And at first, I was like, we should probably not do this episode because their annual report comes out in two days. What if we're not current? And then I realized, this is Hermès. The short term is of no consequence.

**David Rosenthal** (0:16)
Yeah. Also, the Hermès annual reports are the most beautiful annual reports ever created in the history of the financialization of mankind.

**Ben Gilbert** (0:28)
You might think, you can't do all of your charts in orange. You need different colors, but you would be wrong.

**David Rosenthal** (0:33)
The illustrations, the themes, you can tell they care.

**Ben Gilbert** (0:37)
You can tell. All right, let's do it.

**David Rosenthal** (0:40)
Let's do it. Is it you? Is it you?
Is it you?

**Ben Gilbert** (0:57)
Welcome to Season 14, Episode 2 of Acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert.

**David Rosenthal** (1:05)
I'm David Rosenthal.

**Ben Gilbert** (1:07)
We are your hosts. Today, we tell the story of a handbag company that won't sell you a handbag. A traditional saddle maker that makes very little of their revenue from saddles. A company that somehow has grown to be worth over $200 billion, despite rejecting manufacturing efficiencies and economies of scale. A company so obsessed with craft and a reputation for quality that they have stayed independent while every other luxury brand has merged into conglomerates. That's right, listeners. Today, we tell the oldest story we have ever told here on Acquired, older than Standard Oil or the New York Times. This company dates back to 1837 in Paris, France. The crown jewel of the luxury industry, Hermès.

**David Rosenthal** (1:54)
Ben, do you know what company was also founded in 1837 that we have discussed quite a bit on Acquired?

**Ben Gilbert** (2:03)
No, I do not, David.

**David Rosenthal** (2:05)
That would be the other iconic color luxury company, Tiffany.

**Ben Gilbert** (2:10)
Oh, really?

**David Rosenthal** (2:11)
Also founded in 1837

**Ben Gilbert** (2:13)
Ah, Chuck T. Well, this episode, listeners, has been probably just under 12 months in the making. LVMH was just after one year ago, and it was in that episode that I feel like I got a real penchant for everything that Hermès stood for. You know, after 187 years, still under family control, they're on their sixth generation of family leadership at the helm. I don't know, David, everything Hermès does is just so focused and intentional and pure. As much as they sort of get lumped together with brands owned by LVMH, they are in many ways the anti-LVMH.

**David Rosenthal** (2:49)
Oh, we've got a great discussion of that later in the episode. I used to think that and I no longer think that. But after our LVMH episode, I mean, you were so inspired by learning about Hermès, you went out and you bought your first luxury object, right? And it was not an LVMH brand.

**Ben Gilbert** (3:05)
Yes, that is true. My wife and I were on our honeymoon listeners after LVMH, so last summer, and we were in Aix-en-Provence and we walked by an Hermès store and I thought this would be a great time to go in and get each other something as a honeymoon gift. So my wife got a little Twilly scarf and I got an Hermès belt. And it's the only luxury item I own of any luxury brand, traditional luxury brand.

**David Rosenthal** (3:28)
Yeah, as foreshadowed on our holiday special episode a couple months ago. Yep.

**Ben Gilbert** (3:32)
Well, listeners, if you want to know every time an episode drops, you can sign up at acquired.fm slash email. You'll get hints at what the next episode will be and follow up facts from previous episodes when we learn new information. Come discuss this episode with us at acquired.fm slash Slack. Come check out our second show ACQ2, where we interview founders, investors, and experts often as follow-ups to these episodes. Before we dive in, we want to briefly share that our presenting sponsor this season is JP. Morgan, specifically their incredible payments business.

**David Rosenthal** (4:03)
Yeah, we really uncovered the breadth of JP. Morgan Payments as we went deep into industry research for our Visa episode last year. Just like how we say every company has a story, every company's story is powered by payments, and JP. Morgan Payments turns out to be a part of so many of our acquired companies' journeys.

**Ben Gilbert** (4:20)
So with that, this show is not investment advice. David and I may have investments in the companies we discuss, and this show is for informational and entertainment purposes only. David, I feel like we're starting before 1837