Hermès vs Cartier (Richemont)

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.

Louis-François Cartier took over his master’s workshop in Paris, initially catering to the city’s elite. The brand quickly gained a reputation for unparalleled craftsmanship and innovative design. Throughout the late 19th century, Cartier became the go-to jeweler for European royalty, earning the famous nickname "the jeweler of kings and the king of jewelers" from King Edward VII of the United Kingdom.

Cartier is credited with inventing one of the first practical wristwatches, the "Santos," designed for the aviator Alberto Santos-Dumont. This shifted the focus of luxury horology from pocket watches to wrist-worn instruments, establishing Cartier not just as a jeweler, but as a master watchmaker. Its geometric designs and iconic aesthetic became the blueprint for the entire luxury watch industry.

Under the ownership of the luxury conglomerate Richemont, Cartier underwent a massive modernization. The brand moved away from strictly catering to the super-elite, expanding its high-jewelry and watch collections into a global luxury business. Despite the expansion, Cartier managed to maintain an air of exclusivity and tradition, ensuring that its products remained high-status symbols in a globalized market.

In an era where many luxury brands diluted their value, Cartier doubled down on scarcity. By controlling the distribution and limiting the production of its flagship collections (like the Love bracelet and the Tank watch), the brand managed to preserve its incredible pricing power. Cartier became the primary growth engine for Richemont, consistently outperforming competitors by focusing on timelessness rather than fleeting trends.

By mid-2026, Cartier stands as the most stable and prestigious brand in the Richemont portfolio. Its ability to command premium prices while maintaining a legacy of deep, historical prestige makes it a benchmark for the luxury industry. Under the management of Richemont, Cartier continues to define the intersection of jewelry art and horological engineering.