Rupert will chair Richemont as sales struggleComment on this story
Johannesburg - If Johann Rupert has not yet learned fly-fishing, he had better do so soon.
Richemont said yesterday that the 63-year-old billionaire, who is on a year-long break, would stand for chairman of the Swiss owner of 20 luxury goods businesses including Cartier when his sabbatical ended in September.
Rupert, who spent 25 years building the luxury goods maker by merging brands like Cartier and Montblanc, said last year that he wanted time off to catch up with his reading list and to learn fly-fishing.
The announcement of Rupert’s return “ends uncertainty whether he would come back or not, if there were perhaps health issues”, Jon Cox, an analyst at Kepler Cheuvreux in Zurich, said. “He steps in again when things have not been going well. In the past, as executive chairman, he was hands-on when there was any deterioration in profit.”
Richard Lepeu and Bernard Fornas became joint chief executives in April last year after Rupert, the controlling shareholder, gave up his role.
He served three stints as chief, returning in 2003 to steer the company through a slump in revenue related to the spread of severe acute respiratory syndrome in Asia, and in 2010 when Norbert Platt resigned for health reasons.
The Geneva-based company also announced little changed full-year earnings and a 40 percent dividend increase.
Richemont, which had cash of e4.66 billion (R66bn) at the end of March, said it planned to raise its dividend to Sf1.40 (R16) a share, above the Bloomberg forecast of Sf1.15.
The stock rose as much as 5.6 percent in Zurich yesterday, the biggest intraday gain in a year. The JSE-listed stock closed 4.15 percent up at R105.55, giving it a market capitalisation of R1.08 trillion.
Operating profit was little changed at e2.42bn in the 12 months to March as sales in mainland China declined due to the crackdown on extravagant spending among government officials, the company said.
The practice called “gifting” in the Chinese market cut as much as 20 percent to 30 percent from sales of some brands, executives said.Richemont got 40 percent of its sales from the Asia-Pacific region.
Revenue growth in its Europe unit moderated to a “high single-digit” rate.
Revenue gained 5 percent to e10.7bn. Exchange rate shifts such as the weakening of the dollar against the euro stripped 5 percentage points off sales growth. Sales last month rose 6 percent year on year excluding currency fluctuations.
Richemont owns about 20 businesses, most of which are at least a century old, including Vacheron Constantin, a Swiss watch maker founded in 1755, and Purdey, a luxury shotgun maker formed in 1814. The most recent addition is Giampiero Bodino, an Italian high-end jeweller that sells by appointment only. Restructuring at Montblanc, which reduced some points of sale and had a 5 percent drop in sales, led to provisions of e25 million, it said. It plans capital expenditure of e900m. – Bloomberg