From The Economist's 1843 Magazine, December 11:
Nicolas Puech had a 6% stake in the French fashion house. Then his stock went missing
In September 2022 the board of the Isocrates foundation gathered in Florence for its annual meeting. This wasn’t your usual corporate shindig—the group lingered over meals in swanky restaurants, visited museums and wandered sun-dappled streets. One day, things would undoubtedly have to become more formal. The small foundation, which gave money to a number of humanitarian causes, was in line to receive billions of euros when its benefactor died, which would make it one of the biggest philanthropic institutions in the world.
Its founder, Nicolas Puech, was the largest individual shareholder in Hermès, a luxury-goods firm. From 2004 he owned nearly 6% of the company, a stake that would now be worth €13bn ($15bn). Puech, who is part of the Hermès family, has no children. The entirety of his vast fortune was destined for the Isocrates foundation, which he had set up in 2011 on the advice of his Swiss banker of 24 years, Eric Freymond. Freymond had organised the trip to Florence, entertained the board members at his Tuscan mansion and remained at Puech’s side throughout—the foundation’s secretary, Nicolas Borsinger, described his behaviour as “intimate” and “obsequious”.
At the meeting, Puech barely spoke, weighing in only on the precise shade of green for the foundation’s new logo. “You didn’t get the impression this was his fortune,” said a source who was on the trip. What followed came as a shock to everyone involved. Freymond returned home to find a letter dismissing him from the board. By October Puech had revoked the powers he had granted Freymond to manage his money. He later filed a criminal complaint in Geneva, accusing Freymond of “massive fraud”. Puech had realised that his Hermès shares were nowhere to be found. Worse still, they had been missing for more than a decade. Hermès itself had no idea where they were.
Many of the fanciest luxury brands, such as Hermès, Ferragamo and Prada, remain family-run despite being publicly listed. Bernard Arnault and his family hold a controlling stake in LVMH, the world’s biggest luxury conglomerate. Brands work hard to cultivate an image of themselves as genteel clans with an insistence on tradition.
Hermès, which is more than 65% family-owned, prides itself on its centuries-old leatherwork techniques. It cannily limits production of its most coveted products, keeping prices high: a Birkin bag costs upwards of £10,000 ($13,350) in a shop and a multiple of that on the resale market. Selling mainly to the very rich—unlike say, Gucci, which also sells to the aspirational middle classes—insulates Hermès from the ups and downs of the luxury industry. Its customers are less likely to cut back on spending during periods of economic instability. This is why Hermès’s share price has risen by roughly 150% over the past five years (while other luxury stocks are up by 50% at most).
But the mystique that makes luxury houses so lucrative also carries risks. Family firms are often governed not by corporate codes but by decades-old loyalties, rivalries and unspoken understandings. Heirs think in generations, not quarters, and can be resistant to cost-cutting. Family businesses are also vulnerable to succession crises, mismanagement and takeover attempts—especially with sprawling dynasties where relatives are scattered across the globe.
The saga of Puech’s missing billions—almost certainly one of the biggest frauds in history—raises questions beyond who is to blame. Are Hermès’s shareholders being told the full story? And behind the runways and polished shopfronts, just how dirty is the fight among Europe’s luxury dynasties?
In 1837 an enterprising craftsman named Thierry Hermès opened a shop selling horse harnesses in Paris’s ninth arrondissement. Business was brisk but the firm really took off in the 1850s, after Napoleon III seized power and embarked on modernising the capital. Paris was transformed into an elegant metropolis with parks and wide boulevards, perfect for horse-drawn carriages. Speculators poured money into the city, building apartment blocks, hotels, theatres, restaurants and department stores. As Paris became a place for the newly minted bourgeoisie to see and be seen, the luxury industry took off. Napoleon III’s wife, Empress Eugénie, became an unofficial brand ambassador: she carried her belongings in Louis Vuitton cases and bedecked her horses in Hermès.
Each subsequent generation has steered Hermès in a slightly different direction. Under Thierry’s son, Charles-Emile Hermès, the firm began making saddles (legend has it that customers started to complain their horses were better dressed than they were). Charles-Emile’s son, Emile-Maurice Hermès, designed an oversized leather bag in which clients could carry their boots. In the early 1980s Emile-Maurice’s grandson, Jean-Louis Dumas, sat next to Jane Birkin, a British actress, on an aeroplane. When Birkin complained about the lack of roomy handbags on the market, Dumas sketched an initial design for what would become the Birkin bag.
The family still runs Hermès like a small atelier. Production expands only marginally each year, despite lengthy waiting lists, and each workshop is capped at 300 staff. Craftsmen, who are all well-versed in the label’s history, refer to Emile-Maurice and Jean-Louis by their first names, as if they were talking about their own grandparents.
Today, the family is split into three branches, descended from Emile-Maurice’s daughters. The Dumases, who hold the top jobs, are discreet Protestant workhorses—Axel Dumas is the current chief executive. The Puechs share that reserve but largely stay out of operations. Until recently, it was the Guerrands—spread across Morocco, America and elsewhere—who were seen as the loose cannons of the family, their progeny finding themselves the subject of tabloid headlines in the early 2000s.
Being in charge of a family firm requires more than just business acumen. “One job of the CEO of Hermès”, said Stéphane Wargnier, who worked in communications at the company, “is to keep the family bonded.” At any moment there is an heir in need of cash and eager to sell their stake. Top executives organise trips to overseas store openings for far-flung relatives with the express aim of “making them feel part of the life of the firm”. Even those with tiny stakes are invited to glitzy parties and given Birkins as gifts.
Nicolas Puech, a great-great-grandson of Thierry Hermès, was born in a suburb of Paris in 1943. He and his siblings grew up roaming the Hermès headquarters on Rue du Faubourg Saint-Honoré, but Puech showed little interest in the business. He preferred partying with socialites and celebrities, including Yves Saint Laurent. Puech’s older brother, Bertrand, allegedly considered placing him under guardianship to stop him from squandering his fortune. (Nicolas Puech declined to comment on any of the matters raised in this article.)
Some say Puech’s extravagance made him a black sheep; others say relatives disapproved of the fact that he is gay. In any case, like many party animals, he mellowed with age. In the 1990s he retreated from public life and withdrew from his family. Eventually, he left France, shuttling between a farm outside Seville and a converted inn in the Swiss Alps.
In 1996 Puech’s mother died. Yvonne Puech (née Hermès), left a 4.7% stake in the company to her son. (In 2004 he acquired another 1% when his sister Odile died.) According to court documents, Puech deposited the shares in three Swiss banks, on the advice of Freymond, whom he had met in 1989.
Freymond ushered Puech into Geneva’s beau monde. The pair holidayed together and bonded over their love of art. In 1998 Puech gave Freymond near-total control of his finances, including the right to sell assets on his behalf, and the following year granted him power of attorney. According to court documents, Puech placed “great trust” in his banker, signing papers without a glance and rarely checking his accounts. He got to know Freymond’s associates, including Farah Diba, the last empress of Iran, and Freymond’s friend and lawyer, François Besse, who began representing Puech too.
Puech and Freymond were, in some ways, an odd pair. Every source I spoke to used the same words to describe Puech: modest, private, gentle—if not particularly sharp. They told me that after leaving France he didn’t flash his cash (though he made exceptions for the occasional lavish birthday party, private air travel and a bordeaux-coloured Bentley).
Freymond, 15 years his junior, was a paid-up member of Geneva’s elite. In photographs he tends to sport tailored suits and owlish spectacles, and is often holding a glass of champagne. Freymond and his wife Caroline were renowned for throwing high-society parties at their house on the ramparts of Geneva’s old town and their 18th-century chalet near Gstaad. Those soirées helped Freymond nurture influential connections. After studying law and working at a private bank, he founded his own firm in 2001 called Semper Gestion, which grew to manage billions. Freymond oversaw the fortunes of French dancer Zizi Jeanmaire and Swiss Bond girl Ursula Andress. He also got to know several members of the Hermès clan, a number of whom became his clients. It wasn’t long before his little black book caught the attention of executives at LVMH.....
....MUCH MORE, the story is just beginning.
Previously:
We mentioned, in connection with Rybolovlev and his art dealer:
Dirty deeds, not dirt cheap.
It's pretty well established that the punishment for an agent's breach of the duty of loyalty to his principal is death.
At least in Russia at any rate— Big Money: "What Did Sotheby’s Know And When Did They Know It", November 2016
December 2023 - "Hermès heir wants to leave his fortune to his gardener"
August 2024 - "Luxury Heir Alleges His $13 Billion Hermès Fortune Has Vanished"
Have they checked the couch cushions? People say they sometimes find things behind the couch cushions.April 2025 - "Birkin bags will cost even more as Hermes vows to hike prices in US to counter Trump tariffs"
July 2025 - "Original Birkin bag shatters record with £7m sale"
August 2025 - Meanwhile In France: "A $15 Billion Hermès Mystery. A Sudden Death. And, Finally, Some Answers"
