Have 50.2 percent of Hermes's shares

LVMH Moet Hennessy Louis Vuitton SA will struggle to get control of hermes International SCA as the family is "revolted" and united by the world's largest luxury goods maker's stake-building, its chief executive officer said. Fifty-two members of Hermes's founding family won a waiver last month to set up a new holding company without having to bid for the rest of the luxury-goods maker after LVMH, run by Bernard Arnault agcpimtyfl, built up a 20.2 percent stake in its Paris- based rival. The structure will have 50.2 percent of Hermes's shares and right of first refusal on an additional 12.6 percent agcuimtyfl."One day, Mr.Arnault will realize he can't get control," hermes birkin bag CEO Patrick Thomas, 63, said in an interview late yesterday. "The family is unbelievably united."

Hermes handbags became a Societe en Commandite par Actions to guard against a possible takeover, Thomas said. The structure is used by family owned businesses allowing them to keep control of decision-making even if they become minority hermes shareholders. While that offered sufficient protection against LVMH, Thomas said, the family created the holding company to show unity."We wanted to send a message to Mr. Arnault," Thomas said. Arnault's actions united the family to set up the holding company, which is "devised to last."LVMH announced in October it held a 14.2 percent stake in Hermes and derivative instruments for another 2.9 percent that it has since exercised. LVMH, which now holds 20.2 percent of the Birkin bag maker, has said it doesn't intend to seek a board hermes belt seat or control.

'Challenge' To get control of hermes ties, Thomas said Arnault would need two-thirds of Hermes shares plus approval from the Commandite, which would be "a challenge."Hermes today raised its outlook for operating-margin growth after fourth-quarter sales beat analysts' estimates and helped the company surpass its 2010 revenue forecast. Hermes's performance is the best means of ensuring shareholder loyalty, Thomas said in an interview on BFM Radio, after the release of the numbers. Revenue may climb between 8 percent and 10 percent at constant rates of currency exchange in 2011, Lionel Martin- Guinard,hermes shop director of financial operations, said on a conference call. Sales in January are "in line" with the annual forecast, he said.

Hermes de shares climbed as much as 3.80 euros, or 2.5 percent, to 154 euros and hermes traded at 148.25 euros as of 1:53 p.m. in Paris. The stock has fallen 5.4 percent this year, giving the company a market value of 15.7 billion euros ($21.6 billion).Successors Thomas doesn't anticipate retiring before the "fight" with LVMH has been won, though he would step down when the family wanted him to. "I am committed to the hermes family," Thomas said. "I'm not going to let them down."The executive said he was grooming his successor and was organizing the company for the moment the board would need to appoint a replacement.Candidates include myhermes family and non-family members, he said.

"Hermes scarf is full of talent," Thomas said. "There are lots of people who can take the top job who are better than me."Full-year operating margin will widen by about 3 percentage points, Hermes said in a statement, lifting a previous forecast for an increase of as much as 2 percentage points. Pretax profit will rise by slightly more than 40 percent, the maker of leather bags and silk scarves said.Sales for the three months ended Dec. 31 climbed 25 percent to 736 million euros, from 587.3 million euros, Hermes said. The average estimate of eight analysts compiled by Bloomberg was 709.4 million euros. Excluding currency moves, full-year revenue advanced 19 percent to 2.4 billion euros, beating a November forecast of about 15 percent growth.Hermes will pay a dividend of 1 euro a share on Feb. 10 and plans to open 10 stores this year, the company said. Net cash was 830 million euros as of Dec. 31, mulberry handbags said.