It reached an agreement with Hermes in the French courts to relinquish most of its 23 per cent stake in the handbag and silk scarves firm, which it had acquired by stealth. LMVH has also agreed not to buy shares in the company for five years. The move ends a four year tussle, and represents the first time in two decades that LVMH chief Bernard Arnault has been thwarted in his bid to purchase a brand.  But the gains from a rise in the share values – now trading at more than double their purchase price in 2010 - will no doubt soften the blow.

Counterfeiting agreement

Days later it signed a “co-operation agreement” with Google Inc to address counterfeiting. LVMH had accused Google of selling protected words as keywords, which meant that when consumers searched the company’s luxury brand names, links would take them to websites selling counterfeit items.  According to LVMH, under the deal, 'Both parties commit to further enhance their current extensive resources to tackle the advertising and sale of counterfeit goods online.'

New sectors

Meanwhile, the champagne to handbags group has been branching into new sectors including cocktail bars, upmarket delicatessens and record labels in the Far East through private equity firm L Capital Asia.  Ravi Thakran, LVMH’s group president for south and South East Asia, is reported as saying that 'We don’t have to be in luxury all the time, we can be in layers below luxury, into what I’d call the affordable, aspirational space.'