Today’s breakdown has been at the top of our to-do list since the show started. There are few brands as strong as this one and the way the Dumas family has nurtured it over six generations is remarkable. We are, of course, talking about one of the ultimate status symbols, Hermès. What began as a specialty saddles business in the mid 1850s has become famous for iconic handbags and other luxury items. Last year, the business earned $9 billion at 70% gross margins. It does things differently and to explore the details behind its difference, I’m joined by long-time shareholder, Mark Urquhart. Mark is a partner at Baillie Gifford and head of their Long Term Global Growth team, which he co-founded in 2003. Hermès was in the original portfolio when it launched in 2004 and has been held since then. Please enjoy this breakdown of Hermès.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.   -----   Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.   Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt   Show Notes [00:02:29] - [First question] - The iconic Birkin and Kelly bags explained [00:04:41] - New price and resale price for a Hermès bag [00:06:13] - Production and distribution dynamics of Hermès bags [00:08:11] - Overview of the company’s scale and structure [00:09:52] - The basic margin structure and history of Hermès [00:12:10] - Defensibility of investing in a luxury brand like Hermès [00:15:48] - Market size and potential for future growth [00:21:20] - The power of Hermès’ long heritage history [00:26:37] - His definition of luxury and the role of luxury products in culture [00:30:49] - The Hermès manufacturing model and their focus on craftsmanship [00:35:28] - Strategies that Hermès has chosen to avoid [00:38:51] - The importance of their six-generation family stewardship [00:42:42] - How the family has maintained the business for so long [00:45:41] - Overview of retail sales and their distribution model [00:48:28] - Learnings from Hermès’ marketing strategy [00:52:08] - How he would set up a brand if he needed it to compete with Hermès [00:54:28] - Companies that come close to Hermès from an investment perspective [00:56:20] - The complexity of Hermès’ valuation and growth potential [01:00:59] - Why Hermès maintains a conservative capital allocation model [01:03:07] - The importance of their consistently simple products and business model

This week is the second half of our mini-series on the two major levers to reduce the impact of climate change. Last week, we covered Carbon Removal with Nan Ransohoff. Today we're focused on Carbon Reduction. To break down the business of decarbonization, I'm joined by Christian Anderson. Christian is the co-founder of Watershed, which helps companies like Monzo, Spotify, and Walmart measure, report, and act on their emissions. We discuss the impact on financial statements, why debt financing is key, and why people say no to climate programs. Please enjoy this breakdown. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.   -----   Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.   Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt   Show Notes [00:02:14] - [First question] - Climate change as a result of the inertia of capital [00:03:44] - Financing a capital stock transformation for decarbonization [00:05:22] - Decreasing dependence on legacy tech to mitigate humankind’s energy debt [00:08:32] - System of incentives to use and invest in clean technology [00:10:59] - Banks and debt financiers getting into the climate effort [00:12:46] - How Watershed’s individual corporate customers approach decarbonization [00:15:30] - Complexity and recent progress to decarbonize industry [00:18:25] - How more effective energy will accelerate the decarbonization of supply chains [00:20:58] - Surprising cost curves for various clean energy processes [00:24:16] - Energy solutions for the most energy-intensive applications [00:26:44] - The impact on corporations’ balance sheets and stakeholders [00:29:49] - Why sophisticated companies are needed to drive the decarbonization transition [00:31:46] - How companies measure and then modify their carbon footprints [00:35:00] - Companies getting serious about climate issues in the past year [00:37:29] - Capital flowing to tech niches and the problem of infrastructure regulation [00:40:35] - Digital tools for decarbonization projects [00:42:43] - How new businesses approach the climate issue from inception [00:44:39] - Structure of Watershed’s buyers [00:46:53] - Why people and businesses say no to Watershed [00:48:55] - Perspectives across Watershed’s global markets  [00:51:36] - The most worrisome aspects of the climate crisis [00:53:26] - Simplicity in the complex domain of climate change [00:54:39] - The overall sentiment toward the climate movement  [00:57:37] - Forces that antagonize the climate movement [00:59:25] - An exemplary case study of Apple’s climate work