Anton Rupert introduces young leadership to the Richemont board
RICHEMONT chairperson Johann Rupert elevated his son Anton to the board, tapping a new generation of leadership as the Swiss luxury-goods group struggles to keep up with French rivals leading an industry rebound.
Six months after saying he wanted to see fewer grey-haired Frenchmen on Richemont’s board, the South African billionaire is adding two women – one of them a Beijing-born professor – and former Google executive Nikesh Arora, who is from India. The younger Rupert, 29, will bring digital expertise, his 66-year-old father said on Friday as he reported weaker-than-expected earnings that sent the shares tumbling.
“It is now time to hand over to a younger group of executives,” Rupert said. Anton Rupert won’t have an executive role as the owner of Cartier and Dunhill, but will be “the link between the controlling shareholders and the managers.”
It could be the prelude to a broader changing of the guard in a luxury industry that’s bouncing back from a multi-year slump, benefiting from rebounding demand for silk scarves and leather goods in China as well as tourists returning to Europe.
Moet Hennessy Louis Vuitton (LVMH) chief executive Bernard Arnault has appointed some of his children to key roles at the French luxury empire, which has joined rivals Kering and Hermes International in reporting better-than-expected results.
Swiss watch exports recorded the first increase in 21 months in March, supported by recovering shipments to Hong Kong and China. Yet Richemont’s earnings per share fell 46 percent in the latest year and missed analysts’ estimates.
That weighed on a stock price that dropped as much as 6.2 percent in Zurich after recent gains fuelled by investors’ expectations that the company would get a bigger bounce from the luxury rebound.
“Given stellar results elsewhere in the space, the kneejerk reaction could be negative, but once digested, we assume estimates will rise,” wrote Jon Cox, an analyst at Kepler Cheuvreux in Zurich.
Richemont shares have multiplied their value by more than 24 times since 1990, including dividends, and had risen steadily this year until Friday’s drop. That’s elevated Rupert’s worth to $7.6 billion (R101.27bn), according to the Bloomberg Billionaires Index.
A university dropout, Rupert founded Richemont as an investment company in 1988 along with his late father Anton, who made his fortune in tobacco. Rupert has whittled away at a portfolio that now focuses on watch brands like Vacheron Constantin and Baume & Mercier, fashion houses such as Chloe and penmaker Montblanc.
In preparing the company for a new generation, he’ll get a bit of help on the board from the likes of Keyu Jin, a Beijing-born London School of Economics professor, and Arora, who left his role as president of SoftBank Group abruptly last year, two years after jumping there from Google.
The appointment of Arora and Anton Rupert show how luxury companies are seeking to bolster their digital knowhow at a time when shoppers are doing more of their buying online. LVMH this week unveiled plans for its first multi-brand e-commerce site in eight years, putting its own brands like Louis Vuitton alongside those of rivals such as Gucci and Prada.
Richemont said business improved in the second half of the year to March. But sales growth decelerated to 4 percent in the fourth quarter, excluding currency shifts, from 5 percent in the previous period.
A new share-buyback programme of up to 10 million shares over the next three years was announced, after completing its previous buyback programme of more than 5 million shares that began in 2014.
Despite the board shuffle and the appointment of his son, Rupert said he had no intention of stepping aside anytime soon. “The orchestra still needs a little bit of conducting,” he said. – Bloomberg