The Billionaire Hermès Heir Who Lost His Fortune, Adopted His Gardener, and Ghosted Qatar's Royal Family
On legacy, loyalty, and the limits of wealth
Ok, HI! This week's newsletter is going to be a little different.
I'm so tired of the news right now. Honestly it feels repetitive, overwhelming and uninspired.
Luxury is tanking - got it.
No one is getting funding (unless you’re Adam Neumann, resident WeWork scammer, and then you can raise $100M+. I can’t even get into this without losing my mind) - got it.
Tariffs are on, off, up, down - got it.
Everything is up in the air, nothing feels creative, I'm just done. And I gave everyone fun news on Monday (btw - felt like that was such a fun little read so go like it and tell me I’m funny).
What I do like right now (and always) is gossip. I don't care - I'll say it! I love the art of storytelling with a lil pizazz, call me an anthropologist! And so today - that's what we're doing.
I was planning on going full "who the fuck did I marry part 38" on my notes the other day and bringing you all along through this story (maybe that's actually more Zola inspired) from start to finish but decided to save it for today.
The story is juicy, it's relevant today in more ways than one and it's my newsletter and I can do whatever I want!
Today we're talking all about the family drama in Hermès, the heir who has maybe (or maybe not) lost billions, the Qatar royal family (richhhh honey!) and how this all wraps up to today where Hermès has officially dethroned LVMH as the most valuable luxury brand in the world.
No more news, no more stats - just pure fashion, drama and $$$$$.
But first, let's set the mood. Queue up that Soulection radio on Spotify, get comfy under that St. Frank Alpaca throw that makes you feel *spiritual* and get ready. It's Thursday, we're analyzing luxury power moves and let's be honest - this will be more educational (and enjoyable) than whatever market forecast you were about to read.
Let's fucking do it, shall we?
Also, give the group chat something to talk about:
Every delicious drama needs a complicated main character, and ours is Nicolas Puech, an 82-year-old billionaire and direct heir to the Hermès fortune. If you've been screaming at your screen during Succession or The White Lotus, thinking "nobody is actually this messy with their money" – let me introduce you to a real-life Roy family situation that would make even Logan blush.
Puech, the great-grandson of Thierry Hermès (yes, THE Hermès who founded the luxury empire in 1837), owns roughly 5% of the company's shares – a stake now worth somewhere around $15-16 billion. Casual. But here's where it gets wild: last year, Puech made headlines when he claimed his entire fortune had mysteriously vanished. He filed suit against his former financial advisor, alleging the man had orchestrated the disappearance of billions in assets but the Swiss courts ultimately dismissed his claims, citing insufficient evidence and leaving fundamental questions about the whereabouts of his shares unresolved. Can you imagine “misplacing” $16B?
That alone would be a story, but we're just getting started.
Then last fall, Puech made a succession decision that sent ripples through both financial and social circles, as he decided to adopt his gardener as his heir. Not a typo. His gardener. The man who tends his Swiss estate's hydrangeas is now potentially in line to inherit one of fashion's largest fortunes (if it ever reappears). And while I'm all for making unconventional family arrangements, you have to admit there's a certain dramatic flair to bypassing 100+ blood relatives in favor of the guy who prunes your roses (it’s so bitchy I love it).
But Nicolas wasn't done serving us plot twists.
Fast forward to February 10th of this year, when according to court documents, our protagonist signed an agreement to sell those 6+ million Hermès shares (the ones he supposedly couldn't find) to none other than Sheikh Tamim bin Hamad Al Thani, the Emir of Qatar. Yes, THAT Qatar – the royal family that already owns Harrods, Printemps department stores, and has their fingers in every luxury pie across Europe (love that for them).
And then – because apparently we needed another twist – weeks after signing the deal, Puech backed out, telling the Qataris he couldn't deliver the shares because, oops, he doesn't know where they are! Teeheehee!
The Qatar royal family, not exactly accustomed to being ghosted, filed a $1.3 billion lawsuit through their investment entity, Honor America Capital, just days ago in federal court. The lawsuit claims breach of contract and seeks damages for "lost profits, opportunity costs, and reputational harm."
The significance of this cannot be overstated - we're watching a direct legal confrontation between old European money and one of the world's most powerful sovereign investors, ahem, royal families.
Before we dive deeper into Nicolas's mess, let's back up a bit for those who might not be familiar with why this drama matters so much. Hermès isn't just any luxury brand – it's arguably THE luxury brand, one of the last true family-controlled luxury houses at a scale that matters.
Founded in 1837 by Thierry Hermès as a high-end harness workshop catering to European noblemen, the company evolved from equestrian equipment (thus the iconic horse-drawn carriage logo) to the ultimate status symbol we know today. The transformation was gradual – first saddles, then leather goods, and eventually the legendary Birkin and Kelly bags that have transformed the very definition of luxury waitlists and desirability.
(Sidebar: One time when I worked at Barneys some girl was sneaking in and taking our selection out of private rooms and selling them and I found one on 1st Dibs and got to go undercover shopping to confirm that it was ours. Was crazy- should I do a post about all of the insane shit that happened there?)
What makes Hermès special in the luxury landscape is its obsessive commitment to craftsmanship. We're talking about a brand where artisans train for years before they're allowed to create a single Birkin. Each bag is made by one craftsperson from start to finish, taking 18-40 hours of work in some cases. They never, ever discount. Ever. Their silk scarves are still hand-printed using a separate screen for each color.
Perhaps most fascinatingly, they operate their own crocodile farms in Australia to maintain complete control over their exotic skin supply chain – a level of vertical integration that's practically unheard of in luxury (I’m so far from vegan but it’s actually kind of grotesque). It's traditional craftsmanship scaled in a way that maintains quality rather than compromising it.
Then there’s how Hermès actually sells Birkins which is a masterclass in controlled scarcity and the majority of their entire brand strategy. There are no official waitlists—that's just what they tell outsiders. The real system is all about developing a "profile" with your SA, who's tracking everything you buy across categories. Show up asking for a Birkin on your first visit? Not 100% unheard of, but good fucking luck with that. You'll be politely redirected to scarves or enamel bracelets (I truly cannot) while you prove your commitment.
Store managers receive unpredictable inventory drops with zero advance notice, and associates have total discretion over who gets offered what. The best part? This system flips the power dynamic completely—millionaires and celebrities still need to play the game.
And once you finally get your first Birkin? That's just the beginning of the hierarchy: standard leathers first, then special colors, exotics if you're special, and Himalaya with diamond hardware only for the absolute top-tier clients who've spent years (and millions) developing the relationship or are just special for other reasons. And that’s half the fun- it’s an absolute game of roulette. It's retail psychology turned upside down, and it works brilliantly.
The other extraordinary thing about Hermès? Six generations later, the descendants of Thierry Hermès still control the majority of the company. In an industry where most family-founded luxury houses have long since been absorbed into conglomerates like LVMH or Kering, this level of family control is practically unheard of. The Hermès family has remained fiercely independent, even in the face of multiple takeover attempts.
All of this explains why Hermès just surpassed LVMH to become the world's most valuable luxury company last week. Their stock has jumped almost 300% in the past five years, even while other luxury brands are struggling with slowing demand. Their profit margins are absolutely obscene – we're talking 40.5% operating income as a percentage of sales in 2024. For context, most retail brands are thrilled with margins around 10-15%.
This is why Nicolas Puech's stake is such a big deal. At roughly 5% of the company, it represents both enormous wealth and potential influence over one of fashion's crown jewels.
To really understand this current drama, we also need to talk about the battle that fundamentally changed how the Hermès family operates – their epic showdown with Bernard Arnault and LVMH back in the early 2000s.
Picture this: A peaceful Saturday in October 2010. Hermès CEO Patrick Thomas is enjoying a bike ride through the French countryside when his phone rings. On the line? Bernard Arnault, supervillain for the ages, calling to casually mention that in just two hours, he'll be announcing to the world that LVMH owns 14.2% of Hermès.
What made this move so shocking was how Arnault pulled it off. So here's what happened - imagine if you wanted to buy a competitor's company but didn't want them to know you were doing it. French law said if you buy more than 5% of a company, you have to announce it publicly. Arnault found the perfect loophole.
Arnault started way back in 2001-2002 by acquiring exactly 4.9% of Hermès through subsidiaries hidden in tax havens like Luxembourg and Panama. Why 4.9%? Because French law only required disclosure at 5% - this man literally stayed one tenth of a percent below the radar. The banks purchased the shares and LVMH paid them in cash to avoid leaving a paper trail.
Then, in 2007, he began buying what are called "cash-settled equity swaps" - essentially financial contracts that let him bet on Hermès stock price without technically owning shares. By spreading these swap contracts across multiple banks - Société Générale, Natixis, and Credit Agricole - Arnault kept his name off the paperwork while secretly accumulating a position.
These contracts were supposed to just be financial bets on Hermès stock performance, with LVMH getting paid in cash if the stock went up. But when it came time to collect, LVMH suddenly insisted on getting actual Hermès shares instead of cash and ended up with a 14.2% stake.
That's when Arnault made that now-infamous call to Thomas, who was literally standing beside his bike on a countryside road when he got the news. His response? An instantly iconic line that fashion insiders still quote: "If you want to seduce a beautiful woman, you don't start by [insert horrid word here] her from behind." Then he hung up and got back on his bike.
The most shocking part? Just 72 hours later, LVMH announced they'd converted even more swaps, bringing their total to 17.1% of Hermès. And they somehow acquired all these shares at €80.5 each - a 54% discount from the market price of €176.2. Absolute financial sorcery.
If this sounds like a bunch of finance bro bullshit - let me break this down: It's like telling your friend to hold onto items you're buying at a sample sale that has a 3 per person limit so security doesn't realize one person is grabbing everything. You're still paying for it all, but on paper, it looks like separate purchases. Then when the sale's over, your friend hands everything back to you, and suddenly you've got half the inventory without anyone noticing until it's too late. That's basically what Arnault did with Hermès shares - used banks as his "friends" to hold the shares until he was ready to reveal he owned them all along.
The family's response was swift and decisive. Within weeks, over 50 family members across the Dumas, Puech, and Guerrand branches gathered to create a defense strategy. They formed a holding company called H51 (which controlled about 50.2% of Hermès shares) with a crucial pre-emption right clause: any family member wishing to sell shares had to first offer them to the holding company, effectively asking permission from the entire family.
The battle didn't end there. Hermès filed criminal complaints accusing LVMH of insider trading and market manipulation, while Arnault countersued for slander.
The French market regulator ultimately fined LVMH €10.4 million for "concealing each stage of LVMH's stake-building in Hermès" and "the seriousness of the successive breaches of public disclosure requirements." In 2014, a French court finally brokered a settlement: LVMH had to distribute its 23.1% stake to shareholders and agree not to buy Hermès shares for at least five years.
This battle transformed Hermès from a somewhat loosely organized family business to an impenetrable luxury fortress. The family increased its overall ownership to nearly 67% by 2022 and merged their various investment entities into a unified organization called Krefeld Invest to manage family assets.
Family CEO Axel Dumas later described the LVMH fight as "the battle of my generation" - one that fundamentally changed how the Hermès clan viewed both their business and their vulnerability to outside forces.
Now that we're all caught up on the context, let's get back to our current saga.
The situation with Nicolas Puech is bizarre for several reasons.
First, there's the fundamental contradiction in Puech's legal strategy that would make even the most seasoned corporate lawyers raise an eyebrow. In Swiss courts, he's fighting a battle claiming his financial advisor somehow orchestrated the disappearance of billions in Hermès shares - shares he literally cannot access or control.
Yet simultaneously, he's negotiating their sale to Qatar for €14 billion and signing contracts confirming his ownership (but also saying he’s not involved- we’ll get to that below). It's like watching someone report their car stolen to insurance while simultaneously listing it on AutoTrader.
My best guess as to why he’s doing this? He’s either telling the truth and not involved in the Qatar sale and IS being fucked around by his financial advisor (who would obvi stand to gain) or Puech is creating conflicting legal claims across multiple jurisdictions to preserve optionality - maintaining the ability to claim either ownership or victimhood depending on which narrative ultimately serves his financial interests better. It's financial quantum mechanics - his shares both exist and don't exist until the moment someone forces observation through legal means (and maybe he’ll be here to see that happen, maybe he won’t).
Second, the gardener adoption timeline makes absolutely no strategic sense in relation to the Qatar negotiations. Why legally designate an heir for assets you're simultaneously arranging to sell? It's like renovating a house while signing the contract to demolish it. If the gardener adoption was genuine succession planning, the Qatar deal undermines it entirely. If it was a legal maneuver to protect assets, then negotiating their sale contradicts that purpose ENITRELY.
So wtf is actually going on here? No one knows for certain, but my read on the situation is this: At 82, Puech appears to be hedging his bets in spectacular fashion (see what I did there?). The gardener's adoption likely serves as both a personal middle finger to the family that excluded him from their unity pact and as a backup plan if the Qatar sale falls through, if he was ever even involved (I truly hope everyone is no-contact with this man omg).
It's the ultimate "if I can't have it, neither can they" move - ensuring his billions go to a gardener rather than the cousins and nephews who consolidated power without him. The willingness to pursue contradictory strategies simultaneously suggests a man more interested in control than coherent wealth management.
Third, his willingness to sell to Qatar (again, if he was even involved) represents a stunning philosophical departure from the family ethos that has defined Hermès for six generations (that he clearly never gaf about lol).
This isn't just breaking ranks - it's fundamentally rejecting the core family principle of independence that survived two world wars and countless economic crises. After the family spent years constructing an elaborate legal fortress specifically designed to prevent outside influence (spending millions on legal fees in the process), Puech appears willing to create exactly the type of vulnerability they fought so hard to prevent. The 5% stake would instantly position Qatar as the single largest non-family shareholder, creating precisely the type of external pressure point the H51 structure was engineered to eliminate.
And finally, the geopolitical implications of negotiating with Qatar's sovereign wealth fund only to withdraw cannot be overstated. This isn't just any investor - it's a strategic state actor that has methodically constructed one of the world's most prestigious luxury portfolios. Beyond their headline acquisitions of Harrods (£1.5 billion) and Printemps (€1.8 billion), they maintain strategic stakes in Tiffany, Valentino, and significant positions in LVMH itself.
Qatar approaches luxury acquisitions as both financial and geopolitical positioning - part of their strategy to diversify beyond natural resources. Their investment approach consistently targets heritage brands with strong pricing power - precisely Hermès' profile. The abrupt termination of this carefully negotiated transaction explains their immediate escalation to litigation rather than continued negotiation.
Some financial analysts suggest that even if Puech truly cannot currently access these shares, a court judgment favoring Qatar would create a powerful legal claim over any assets that eventually resurface - whether found by Puech or inherited by his gardener-heir. This creates a situation where Qatar potentially maintains leverage over these assets regardless of how the current investigation resolves.
Either way, it’s not looking good for the Hermès family.
The stakes keep rising in this high-profile dispute.
Just a few days ago, Puech's legal team issued a statement saying he "strongly contests" the lawsuit filed by Honor America Capital - an investment entity formed by Qatar's Deputy Emir specifically to facilitate this acquisition. His lawyers now claim he wasn't involved in the transaction, despite court documentation showing what appear to be agreements signed through his Swiss attorney, François Besse. The fundamental contradiction remains unresolved.
Meanwhile, Puech has reopened his case against former wealth manager Eric Freymond in French courts after Swiss judges previously dismissed these claims. He's still maintaining that his financial advisor orchestrated transactions that obscured ownership of the Hermès shares through structures involving Lombard Odier, the Geneva private bank allegedly holding the disputed securities. By pursuing parallel litigation across multiple jurisdictions, Puech has created a deliberately complex legal landscape that obscures as much as it reveals.
Against this backdrop, Hermès continues its exceptional market performance.
Their 2024 numbers are unheard of in the current market: €15.2 billion in revenue (up 15% when the rest of luxury is struggling and down 2% globally- losing approximately 50M customers), profit margins of 40.5% (double what most luxury brands could ever dream of), and they're so flush with cash they're giving shareholders both a regular €16 dividend and a special €10 dividend on top. And all of this explains why Hermès recently surpassed LVMH to become the most valuable luxury company globally - a position earned through decades of strategic independence (it’s such good revenge too, I can’t).
The resolution of this case will likely influence ownership structures across the luxury sector. Should Qatar secure Puech's stake, it would represent the most significant shift in Hermès' composition since going public.
But regardless of the outcome, this situation highlights a compelling paradox: the same family-controlled structure that creates these succession complexities has also preserved the independence and strategic focus that drives Hermès' market-defying performance and they’ll continue to thrive despite – or perhaps because of – its complex family dynamics.
I don't know about you, but I'm obsessed with this saga for so many reasons.
First, it has all the elements of a perfect drama: billions of dollars, a centuries-old family business, intergenerational conflict, mysterious missing fortunes, royal families, international lawsuits, and a gardener who might suddenly become one of the wealthiest people in Europe.
Second, it tells us something profound about wealth, power, and family dynamics. The Hermès family has created one of the most successful luxury businesses in history, but wealth at this scale creates its own complications. The very measures they put in place to protect their company from outsiders also created rifts within the family itself.
Third, there's something deliciously symbolic about Hermès dethroning LVMH as the world's most valuable luxury company right as this lawsuit emerges. The shadow of Bernard Arnault's attempted takeover still looms large over Hermès, and in many ways, this current drama with Qatar echoes those earlier fears about outside control.
And finally, I'm fascinated by what this reveals about how the ultra-wealthy operate. Nicolas Puech is worth more than the GDP of many small countries, yet he's embroiled in messy, public disputes that seem almost reckless for someone with so much to lose. It's a reminder that even at the highest echelons of wealth, people are still... just people. Complicated, contradictory, and occasionally chaotic.
The coming months will likely bring increasingly complex legal filings across multiple jurisdictions. Hermès itself remains largely insulated from this drama thanks to its holding structure, but the broader implications for family governance in luxury houses are substantial.
The central questions remain deliberately unresolved: Are the shares missing or aren't they? Was the Qatar agreement legitimate or wasn't it? Did Puech actually adopt his gardener or is that another legal construct? The competing claims across Swiss, French, and American courts ensure these questions stay ambiguous as long as possible.
What's clear is that beyond the immediate players - Puech, Qatar, the gardener-heir - this case will influence how other luxury dynasties approach both succession planning and defense against external acquisition. In an industry built on heritage narratives and generational knowledge transfer, the mechanisms of preserving family control remain as valuable as the products themselves.
If you enjoyed this deep dive into luxury family drama, please leave a comment and let me know (should we do more of these? or stick to what we know?).
And if you know someone who'd appreciate this blend of business and gossip, forward it their way – the more the merrier at this dinner party.
Until Monday ~
LYLAS <3
xx
Carly
this was insanely good immediate subscribe
So well researched and written! I would read a book on this by you Carly. And I'd love to read about Barneys behind the scenes :)