Battle in a luxury empire: a billionaire Hermès heir wanted to cut ties with his charitable foundation

Nicolas Puech, a reclusive fifth-generation descendant of the founder of French luxury giant Hermès International SCA (Reuters/ Cordon Press)

Battle lines are hardening in the Swiss canton of Valais between an elderly billionaire heir to the largest family fortune in Europe and his own charitable foundation.

Nicolas Puecha reclusive fifth-generation descendant of the founder of French luxury giant Hermès International SCA, wants to cancel his inheritance contract with his Isocrates Foundation, the charity’s press office reported in a statement. The organization publicly challenges the plan to sever ties.

The move comes after it was reported that Puech, 80, had initiated administrative proceedings to adopt your gardener middle-aged man to whom he would bequeath at least part of his fortune.

“From a legal point of view, the abrupt and unilateral annulment of a succession agreement seems null and unfounded,” Isocrates said in the statement. “The foundation has opposed this measure, leaving the door open for discussion with its founder and president.”

Puech’s lawyer, Jörn-Albert Bostelmann, declined to comment on specific details about his client, but said he might hold a news conference “to separate fact from fiction and dispel some of the nonsense that has been reported in the media.” Meanwhile, Hermès declined to comment on the report or Puech’s involvement in the company.

The unusual dispute is shedding light on one of the most reserved heirs of Hermèswho became a familiar outcast more than a decade ago for his role in a four-year corporate fight against rival LVMH Moët Hennessy Louis Vuitton SEfounded by the magnate Bernard Arnault. The stakes could amount to billions of dollars because Puech, who is not known to have children, reportedly owns about 5.7% of Hermès.

A post-pandemic boom in demand for Hermès products such as leather bags and colorful silk scarves has boosted the company’s market value to 211 billion euros ($231 billion), which would make Puech’s stake worth about 12 billion euros. The clan emerged this month as the world’s third richest in the annual ranking of family fortunes. Bloomberg.

In recent decades, Puech has remained practically off the radardescribed in public documents as a French citizen with an artistic education who resides in Orsieres, in the Valais, an Alpine region bordering France and Italy, known for its elegant ski resorts, including Crans Montana and Verbier.

A post-pandemic boom in demand for Hermès products has boosted the company's market value to 211 billion euros (REUTERS/Benoit Tessier)
A post-pandemic boom in demand for Hermès products has boosted the company’s market value to 211 billion euros (REUTERS/Benoit Tessier) (Benoit Tessier/)

The division within his foundation became public this month when the Swiss newspaper Tribune de Geneve reported that Puech was trying to adopt his gardener and make him the heir to his fortune.

The Isocrates Foundation “is not in a position to judge the process or the context” regarding Puech’s alleged desire to adopt his domestic employee, the organization said in a statement, adding that it will leave “it to the competent authorities to rule on the issue.”

Puech’s move would be a surprising turn in the long saga of the Hermès descendant, who He was seen as a traitor to his family when he failed to join dozens of relatives led by his brother Bertrand Puech in pooling his Hermès shares to tighten control over the company and fend off LVMH, which had quietly acquired a stake.

The size of Puech’s holding company and its role in the four-year corporate battle were among the biggest mysteries to emerge. Puech resigned from the Hermès supervisory board in 2014 and did not add his shares to the two family holding companies that have tight control over the company.

Hermès stopped disclosing Puech’s stake in its 2016 annual report. The previous three years, the company cited signed statements indicating that it owned 5.8% of the capital or 6.08 million shares, of which 900,000 were in hands of his Nicolas Puech Foundation, the ancient name of Isocrates created in 2011. Hermès’ latest report shows that a 5.7% stake is owned by unidentified family members outside of joint stakes.

The scope of Puech’s foundation has also changed in recent years. Headquartered in Sion with offices in Geneva, it initially supported a wide range of actions in “charitable, humanitarian, religious, medical or cultural fields, as well as environmental sciences”, the Valais commercial register shows.

Last year, Isocrates adopted new statutes and changed its approach to support public interest and investigative journalism, responsible digitalization and a “healthy digital public space.” The foundation’s website, which has added details about its operations in recent months, lists more than a dozen beneficiaries, including organizations that defend media and democracy.

“Until further notice, the foundation will not accept new funding applications,” Isocrates said on its website.

Puech initially donated 10 million Swiss francs ($11.5 million) in seed money to Isocrates and will in the future depend on the “fruits and income of his fortune.” as well as subsidies, donations and government aid, in accordance with the statutes. It is unclear how much Puech previously donated to the organization under his former name.

“In no case may the assets of the foundation be returned to the founder, his heirs or donors”say the statutes.

(With information from Bloomberg)