Gucci vs Hermès

Guccio Gucci was born in Florence in 1881 and worked as a lift operator and porter at the Savoy Hotel in London as a young man. He observed wealthy guests arriving with exquisite leather luggage and decided to make something similar. He returned to Florence and opened a leather goods shop in 1921, drawing on the Florentine tradition of fine leather craftsmanship. The GG monogram, the horsebit loafer, and the green-red-green stripe were all introduced in the 1950s and remain central to the brand today.

Grace Kelly was photographed using a Gucci bag to hide her pregnancy from photographers in 1956. Audrey Hepburn, Jackie Kennedy, and Peter Sellers were all photographed with Gucci products. The brand became synonymous with Italian glamour and Hollywood sophistication. Gucci opened stores in New York, Beverly Hills, and Tokyo in the 1960s, becoming one of the first European luxury brands to establish a global retail presence.

Guccio Gucci's sons and grandsons spent decades fighting each other for control of the company in disputes that combined Italian family drama with corporate dysfunction at operatic scale. By the 1980s, Gucci products had been so widely licensed — to luggage, watches, cigarette lighters, even toilet paper — that the brand had lost all prestige. A Gucci logo appeared on approximately 22,000 products. The family had taken one of the world's most distinctive luxury brands and turned it into a synonym for the cheap and ubiquitous.

Tom Ford joined Gucci as creative director in 1990 and, working with CEO Domenico De Sole, transformed the brand. He eliminated the licensing agreements, reduced the product range, and redesigned Gucci's aesthetic from the ground up. His 1995 collection — featuring satin hipsters, velvet suits, and provocative sexuality — was credited with saving the brand. Gucci's revenues quadrupled in three years. On March 27, 1995, while Ford was rebuilding the brand, Maurizio Gucci — the last family member to control the company — was shot dead on the steps of his Milan office. His ex-wife Patrizia Reggiani had hired a hitman. When asked why she hadn't killed him herself, she reportedly said: "I didn't want to get my hands dirty." She was convicted and sentenced to 29 years; released in 2016. The case was dramatised in Ridley Scott's 2021 film "House of Gucci," starring Lady Gaga.

Gucci's revenues peaked at approximately €10 billion in 2022 under creative director Alessandro Michele, whose maximalist maximalism had defined the brand's decade-long renaissance. Michele departed in 2022. His successor Sabato De Sarno debuted in 2023 with a quieter, more restrained aesthetic that divided observers. Parent company Kering reported Gucci revenue declines through 2024 and into 2025, as the luxury slowdown hit hard and De Sarno's reset took time to gain traction. The brand that had been saved twice — once from the family, once from irrelevance — was in the early stages of its third reinvention.

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.