The Battle Over Hermès: A Billionaire's $16 Billion Lost Fortune and LVMH's Dominance Play

When a Luxury Empire Turns Against Its Own

The luxury goods world rarely sees disputes of this magnitude. Yet the legal battle involving Nicolas Puech, a former member of Hermès’ founding family, reveals a stunning allegation: his wealth advisor allegedly liquidated approximately six million shares in the iconic handbag manufacturer without authorization—shares that would command an estimated value exceeding $16 billion in today’s market.

The Core Allegation: A Wealth Manager’s Betrayal

According to reports from Reuters and Bloomberg, Puech initiated legal proceedings against his former wealth manager Eric Freymond, LVMH founder Bernard Arnault, and the conglomerate itself, claiming that Freymond executed unauthorized transactions of his Hermès holdings. The lawsuit specifically values these lost shares at 14 billion euros (approximately $16.3 billion). The timing of these share transfers allegedly coincided with LVMH’s systematic stake-building campaign in Hermès, which began over a decade ago.

This series of events raises critical questions: Was Puech’s former advisor complicit in facilitating LVMH’s acquisition strategy? Did the wealth manager act independently, or was there coordination with other parties?

LVMH’s Response and the Ongoing Investigation

The luxury conglomerate has flatly denied the allegations. A spokesperson told Reuters that LVMH “never, at any time, misappropriated shares of Hermès International” and dismissed claims of holding “hidden” shares as unfounded.

Meanwhile, French authorities have launched a criminal investigation into Puech’s claims. However, the probe faces a significant setback: Eric Freymond, the central figure in the allegations, died in July after being struck by a train in Switzerland. His passing leaves key questions unanswered and complicates the investigation considerably, as Freymond remains the only individual currently under investigation by the Paris prosecutor’s office.

The Broader Context: Arnault’s Expansion Strategy

Bernard Arnault’s track record of aggressive acquisitions cannot be ignored. Over decades, the LVMH founder systematically built his empire through high-profile purchases—acquiring Sephora in 1997 and Tiffany & Co. for $15.8 billion in 2021. His moves in Hermès followed this established pattern.

In 2010, Arnault made headlines when he disclosed that LVMH had quietly accumulated a 23% stake in Hermès. This revelation shocked the luxury sector and sparked intense rivalry between the two houses. The tension eventually led to a 2014 settlement where Arnault agreed to distribute LVMH’s stake to Hermès shareholders—though Arnault’s holding company retained an 8.5% position in the company, maintaining substantial influence.

Why This Matters

This dispute transcends a single transaction. It speaks to governance vulnerabilities in family-controlled luxury conglomerates and raises uncomfortable questions about asset management, fiduciary duty, and how wealth transfer mechanisms function at the billionaire level. For Hermès stakeholders, the case represents both a threat to family control and a test of corporate resilience.