A French court has given Hermes permission to create a controlling family holding in order to ward off advances from rival LVMH.

The decision, announced yesterday (15 September) will also prevent share sales to outsiders by descendants of the founding family, giving it first refusal on shares held directly by the family.

The move upholds the decision made by France's stock market watchdog  Autorite des Marches Financiers (AMF) in January, which exempted the Hermes family, and its more than 50% stake in the company, from having to launch a bid for the entire company, which is usually the case when shareholders have a stake of more than 33%.

The action comes after LVMH, which owns Louis Vuitton, Céline, Fendi, Donna Karan and Marc Jacobs, acquired a 20.2% stake in Hermes at the end of last year. However, it denies seeking a board seat or control.

The Hermes family said the decision will "strengthen the independence of the Hermès Group over the long term, as well as supporting the continuation of its strategy of creativity and excellence in its craftsmanship and observance of its values".