Burberry vs Hermès

Thomas Burberry founded the company in Basingstoke, England, with a focus on creating outdoor clothing for the British climate. His major breakthrough was "gabardine," a breathable, weather-resistant, and incredibly durable fabric. The brand became famous for the iconic trench coat, which was originally developed for military officers during the First World War and eventually became a global fashion essential.

Burberry shifted its focus from functional outerwear to high-fashion luxury. However, the brand struggled in the early 2000s as its signature "check" pattern was over-licensed and became associated with "chav" culture in the UK, damaging its premium reputation. It took years of intense brand management and a complete overhaul of its product line to restore the brand’s high-fashion credibility.

Burberry aggressively pivoted to a more modern, high-fashion aesthetic. By hiring innovative creative directors and focusing on younger, runway-ready designs, the brand successfully distanced itself from its "heritage-only" image. The company invested in digital-first retail and experimental fashion shows to regain its place as a relevant, top-tier luxury fashion house.

After attempting too much modernization, Burberry began a strategic re-centering. The brand realized that its core equity was in British heritage and classic, high-quality luxury pieces. It began a major effort to balance its edgy, new fashion direction with the timeless trench coats and classic designs that formed its original, unshakeable market position.

By mid-2026, Burberry operates as the definitive British luxury house. It has successfully navigated the difficult balance between its functional, heritage roots and the demands of modern, high-end fashion. Under the current strategic direction, the brand continues to capitalize on its unique, recognizable identity to maintain a strong presence in the global luxury goods market.

Thierry Hermès founded a harness workshop in Paris in 1837, making bridles, saddles, and equestrian equipment for European nobility at a time when the horse was the primary means of transport for the wealthy. The quality of Hermès harnesses became legendary; the company supplied equipment to several royal households. Thierry's son Charles-Émile moved the workshop to its current location on Rue du Faubourg Saint-Honoré in 1880, where Hermès remains today.

The automobile gradually replaced the horse in the early twentieth century, threatening the harness business. The Hermès family expanded into leather luggage and accessories for motorists — bags, gloves, and eventually clothing. The pivot preserved the craft traditions of the harness workshop while applying them to new products. Hermès introduced the iconic Kelly bag — originally called the Sac à Dépêches — in the 1930s. When Grace Kelly was photographed using the bag to hide her pregnancy in 1956, Hermès renamed it in her honour.

In 1984, Hermès CEO Jean-Louis Dumas was seated next to actress Jane Birkin on a flight from Paris to London. Birkin's straw bag fell open and her belongings scattered across the cabin floor. She complained that she could never find a leather weekend bag she liked. Dumas sketched a design on an air sickness bag during the flight and promised to make it for her. The Birkin bag became the most sought-after handbag in the world and, by most measures, the best-performing investment asset in luxury goods over thirty years.

In October 2010, LVMH announced it had quietly accumulated a 14.2% stake in Hermès — widely seen as the prelude to a hostile takeover attempt. Bernard Arnault denied any hostile intent. The Hermès family, which retained approximately 73% of the company, rallied together: family members pooled their shares into a holding company to make a takeover impossible. LVMH eventually sold its Hermès stake in 2014 after reaching a settlement with French market regulators. The attempted acquisition increased Hermès's profile and, arguably, reinforced its independence as a brand value.

Academic research published in multiple financial journals has consistently found that Birkin bags have outperformed gold, the S&P 500, and most traditional asset classes over thirty years as investments. Hermès produces Birkin and Kelly bags in deliberately limited quantities and allocates them through a relationship-based system that requires clients to establish purchasing histories before being offered one — creating scarcity that drives secondary market prices to multiples of retail. Hermès reported revenues of €13.4 billion in 2023, with an operating margin of approximately 42% — one of the highest in global luxury — and continued to outperform every major luxury conglomerate during the 2024-2025 slowdown. The company that made harnesses for horses had become the most resilient luxury business in the world.