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Handing Over the Reins: CEO Jean-Louis Dumas Set to Retire at Hermes

Jean-Louis Dumas, who for nearly three decades led Hermes to the top of the luxury sector, is stepping down as artistic director and ceo.

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with contributions from Emilie Marsh
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Dumas announced his exit on the same day Hermès reported an 11.9 percent jump in net profits to 109.1 million euros, or $140.3 million at average exchange rates, which sent shares up 1.7 percent to close at 182.90 euros, or $235.27, on the Paris bourse.

The market is bound to look upon the changing of the guard as a watershed moment for a company that is widely viewed as one of the most attractive targets for acquisitive luxury conglomerates.

"Inevitably, the news should revive speculative interest for the stock," HSBC analyst Antoine Belge wrote in a research note. However, he went on to say, "We believe the transition should go smoothly" and that Dumas' departure "does not imply that there will be a change in control."

Earlier this month, speculation mounted in Europe that Belgian financier Albert Frère was about to take a minority stake in Hermès, which both parties dismissed as unfounded.

And on Thursday, Hermès decided to stop the rumor mill in its tracks.

"The family has asked me to say that they plan to hold on to their shares more than ever," Thomas said firmly. "They have no plans whatsoever to sells shares of the company. The family is more united than ever."

Members of the Hermès family control 74 percent of shares, and the company's statutes prevent any unfriendly advances. Any change in management cannot be affected without gaining the support of at least 66 percent of shares.

Sixteen members of the fifth-generation of the Hermès-Dumas families are shareholders, Thomas said. There are an additional 40 family members in the sixth generation, but not all are shareholders.

Thomas stressed Thursday the philosophy and strategy of Hermès would not change once Dumas exits and that "all the skills remain in the company."

A charismatic and colorful executive with a gentle manner, Dumas helped propel the company to 2004 sales of 1.33 billion euros, or $1.64 billion, on a foundation of solid self-financing and a belief that true luxury runs deep.

That his office on the Faubourg Saint-Honoré is mere steps from where workers piece together custom-order Birkin bags and saddles speaks volumes about his passion for creativity and quality.
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