HERMES, THE LUXURY FRENCH FASHION HOUSE, HAS EXCHANGED CONTRACTS TO BUY THE BOND STREET BUILDING THAT THE WORLD RENOWN JEWELER ASPREY OCCUPIES FOR £75 MILLION AND IS THOUGHT TO HAVE AMBITIONS TO ACQUIRE THE STRUGGLING HISTORIC BUSINESS. HERMES, WHICH IS A MAJORITY-OWNED BY ITS FOUNDING FAMILY WITH ABOUT 30% FLOATED ON EURONEXT, IS ABOUT TO BUY THE BUILDING FROM QUINLAN PRIVATE, RUN BY THE FORMER IRISH TAX INSPECTOR TURNED PROPERTY MOGUL. HERMES BEAT CHANEL TO THE 19th CENTURY BUILDING IS A CLOSE BIDDING WAR. THE 172 YEAR OLD HIGH FASHION HOUSE REFUSED TO COMMENT ON THE PURCHASE, WHICH WILL PRODUCE A YIELD OF AROUND 3%, THE MOST AGGRESSIVE PRICE PAID FOR A BOND STREET SHOP IN THE LAST 18 MONTHS. HERMES' PERFORMANCE IS IN A MARKED CONTRAST TO ASPREY'S, ACCOUNTANTS TO THE FIRM EARLIER THIS YEAR QUESTIONED THE ABILITY OF ASPREY TO CONTINUE AS A GOING CONCERN AFTER IT TUMBLED INTO THE RED, SAYING IT RELIED ON THE GOODWILL OF ITS SHAREHOLDERS TO KEEP IT AFLOAT. THE COMPANY HAS HAD TWO CONSECUTIVE LOSS MAKING YEARS AND HAS SUFFERED A DROP IN SALES FROM £17 MILLION TO £13 MILLION. IT WAS BOUGHT IN 2006 BY A CAYMAN-BASED HEDGE FUND IN A COMPLICATED STRUCTURE. THE HERMES DEAL IS THE LATEST INDICATION OF HOW ATTRACTIVE THE UK PROPERTY MARKET IS TO FOREIGN INVESTORS THANKS TO THE WEAKNESS OF STERLING AND A NEAR 50% FALL IN PRICES FROM THE PEAK OF 2007.
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