David Rosenthal: evaluation

Transcript context

…It's crazy. The reason why no one's a loser here and everyone's a winner is because Hermes truly is the crown jewel. It is such an unassailable, exceptional business. The last 12 months, it did $14 billion in revenue, $5.7 billion in operating income. They have a 71% gross margin and a 44% operating margin. It's a software business that doesn't need any R&D. Tech companies go like, I don't know what Hermes color to call it, but some color with envy over this. There is one more chapter of the story that we have to tell, because that wouldn't have just happened. It wasn't just the Bernard affair in and of itself that led to this 16x market cap increase. He was right, like I was saying earlier. There were, I think, some real problems in the business. That is the story of the sixth generation of Pierre-Alexis and Axel, who I think have certainly fixed those problems, but have really led Hermes, the business, and the company into a whole new era. Yes, that is absolutely right. There is a quote that I want to start with for the Axel Dumas era, which is possibly the best articulation that I've ever heard of business strategy anywhere. He did it in the interview that we were talking about. He says, "Every decision that we make has got some reverse effect." Which I think is like a French translation for trade off. "Every decision we make has got some trade off. There's something I really like about strategy in Michael Porter. Strategy is accepting that you are doing something better than the other, and the other is doing something better than you. You have to pick your fight. I'm always a little bit disappointed when I see someone on my team say that we do everything at the same time. Great. That doesn't happen in real life. You have to pick your fight, and Hermes picks their fights better than anyone/"…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.