This episode is brought to you by:

Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

Show Notes

[00:02:29] - [First question] - The iconic Birkin and Kelly bags explained

[00:04:41] - New price and resale price for a Hermès bag

[00:06:13] - Production and distribution dynamics of Hermès bags

[00:08:11] - Overview of the company’s scale and structure

[00:09:52] - The basic margin structure and history of Hermès

[00:12:10] - Defensibility of investing in a luxury brand like Hermès

[00:15:48] - Market size and potential for future growth

[00:21:20] - The power of Hermès’ long heritage history

[00:26:37] - His definition of luxury and the role of luxury products in culture

[00:30:49] - The Hermès manufacturing model and their focus on craftsmanship

[00:35:28] - Strategies that Hermès has chosen to avoid

[00:38:51] - The importance of their six-generation family stewardship

[00:42:42] - How the family has maintained the business for so long

[00:45:41] - Overview of retail sales and their distribution model

[00:48:28] - Learnings from Hermès’ marketing strategy

[00:52:08] - How he would set up a brand if he needed it to compete with Hermès

[00:54:28] - Companies that come close to Hermès from an investment perspective

[00:56:20] - The complexity of Hermès’ valuation and growth potential

[01:00:59] - Why Hermès maintains a conservative capital allocation model

[01:03:07] - The importance of their consistently simple products and business model