Swiss luxury group Richemont, which owns Cartier and other jewelry brands, is regularly the subject of takeover rumors that its founder, South African billionaire Johann Rupert, has always denied.
But Bernard Arnault, chief executive of rival LVMH, the sector’s number one, is building a stake in Richemont — a move that has so far raised more questions than answers.
In May, Richmond announced that Rupert, 74, would hand over some of his responsibilities to a new chief executive, Nicholas Bosch.
What makes Richemont a prize? The answer is in the shapes.
Jewel in the crown
Based in Geneva, Richemont’s turnover was 20.6 billion euros ($22.5 billion) in the 2023/2024 financial year to the end of March.
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It is number two or three globally in the industry, along with Gucci-owned French luxury group Kering, depending on annual sales figures.
Jewelery makes up 69 per cent of Richemont’s turnover thanks to Cartier, its flagship brand nicknamed “the jeweler of kings and the king of jewellery” for its ties to royalty.
The group does not disclose its sales by brand, but according to Jean-Philippe Bertschy, an analyst at Swiss investment management firm Vontobel, Cartier’s turnover was around 11 billion euros last financial year.
Richemont also owns luxury brand Van Cleef & Arpels, which has seen “tremendous” growth in recent years, Bertschy said.
Anchored in jewellery, considered the group’s strong suit, Richemont has greater resilience in the event of an economic slowdown, with fine jewelery aimed at a clientele far less sensitive to the ups and downs of the economy.
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Watches, fashion and pens
Richemont owns eight watch brands, which make up 18.2 percent of its turnover. Its portfolio includes Baume & Mercier, IWC Schaffhausen and Piaget.
US investment bank Morgan Stanley and Swiss firm LuxeConsult estimate sales of its largest watch brand, Vacheron Constantin, to reach 1.09 billion Swiss francs in 2023, making it one of eight Swiss brands with a turnover exceeding one billion francs .
In 1997, Montblanc’s pen brand diversified into watches, but it remains part of a division that brings together about 10 brands in accessories and fashion (including Chloe and Alaia), including Gianvito Rossi shoes, in which Richemont took a majority stake last year .
That segment is the group’s weakest, according to analysts, including “several brands that have been underperforming for years,” Bertschy said.
However, this segment represents just 12.6 percent of Richemont’s annual turnover.
10% shares, 51% voting rights
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Rupert, 74, set up Richemont in 1988 to bring together the international assets of the South African Rembrandt group, including the tobacco operations on which his father Anton made his fortune.
Through acquisitions, the group gradually withdrew from tobacco to refocus on luxury, including Jaeger-LeCoultre, IWC and A. Lange & Sohne watches.
Rupert owns 10 percent of the capital but 51 percent of the voting rights through a dual class A and B share structure.
The structure offers protection from unsolicited bids, but in 2022 it also helped it fend off an activist fund’s attempt to force changes on the board.
This protection only heightens questions about the intentions of Arnault, one of the world’s richest men.
In late June, Bloomberg News reported that the LVMH boss had taken a stake in Richemont, the amount of which has not been disclosed.
Source: AFP