Clock running down for no-tech wristwatches
JOHANN Rupert, the chairman of one of the largest luxury watchmakers, Compagnie Financiere Richemont, who is in the top 30 of this year’s Rich List, wears both a watch and a Fitbit.
“A lot of people wear a Fitbit and a watch. Apple claims that it is a watch, but it’s not. All I can tell you is that I had a Fitbit and a watch, my wife wears a Fitbit but she got so irritated because of the charging,” said Rupert last month.
But even though smartwatches may annoy the Ruperts, Richemont, which owns watch and jewellery brands such as Cartier, Van Cleef & Arpels and Montblanc, likes the product as it has revived interest among high-end consumers.
“We [Richemont] like it . . . a lot of people never owned watches and used their cellphones, then got used to wearing a watch and now they are going for other watches as well.”
Rupert is the 23rd-richest person on the 2016 Rich List, with total investments of R3.1-billion across three companies: Richemont, Reinet Investments and Remgro.
As technology has begun to dominate the luxury industry, South Africa’s top 1% seems to be investing more in gadgets. Richemont sales indicate that the Swiss watch industry is in trouble, although the jewellery segment seems to be much more resilient.
Atiyyah Vawda, an analyst at Avior Capital, said Richemont’s share price had been the weakest compared to its peers, losing 18.9% in the past year.
Swatch Group had a 9.82% negative share price movement and Tiffany & Co gained 11.5% this year. Louis Vuitton Moet Hennessy had negative sales, which means it is underperforming its peer group.
Vawda said part of the reason for the decline among top-end watchmakers was that the luxury market often has been unable to accommodate new trends, such as new technology in watches, to be competitive.
When buying a watch, “any smartwatch buyer will tell you that one is about emotion and the other is about functionality”, said Vawda.
But it is not just the watch luxury market where the ultrarich are looking for convenience. It applies to cars as well.
Businessman and Porsche South Africa owner Toby Venter has secured the distribution and dealer rights for Bentley.
A spokesman at Bentley South Africa said the rich wanted topof-the-range car models fitted with the latest technology.
Its Continental range is its bestseller, with prices from R3million to about R4-million for the Flying Spur model, which consumers can kit out as they want.
On the showroom floor stands a Porsche 918 Spyder Hypercar which costs about R48-million and is the group’s most expensive car. However, the car, part of a collection, is not for sale, as there are only 918 in the world.
It is all about R90-million bargains for Christo Wiese’s daughter Clare Wiese when it comes to buying property.
Wiese told the Financial Mail this week that she had knocked down the asking price of R150million to buy a home in Clifton at auction for R90-million. It has six bedrooms, eight bathrooms and six garages.
Basil Moraitis, the area manager for Pam Golding’s Western Cape Atlantic Seaboard and City Bowl office, said for high-end buyers it was all about the setting and panoramic views, as well as the extent of the entertainment areas and luxuriousness of the general accommodation available for entertaining guests.
“If the property is truly unique and offers unrivalled views in a sought-after beachfront or elevated position, the price can exceed R100-million.”
Most of the investment this year has been in Clifton, Camps Bay, Bantry Bay and the V&A Marina. “In fact, anywhere on the Atlantic Seaboard beachfront is now deemed to rival the best beachfront positions in the world.” Buyers in these areas “are the ultra-wealthy, more often referred to as ultra-highnet-worth individuals. They come from various sectors including mining, retail, IT, banking, services and real estate,” said Moraitis.
Despite Richemont’s underperformance, its executive team received bonuses.
For 2015, Bernard Fornas, a non-executive director at Richemont, and Richard Lepeu, the former group CEO, got bonuses of R43.5-million and R34.98-million respectively, the first- and second-highest paid bonuses for that year.
Although the bonuses were lower than last year’s, Vawda said they were unjustified.