May 16, 2013
Richemont chairman to take year off as growth picks up
May 16, 2013
ZURICH - Richemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the world's second-largest luxury goods group in the hands of a recently-named joint chief executive team.
Deputy Chairman Yves-Andre Istel will chair meetings of the board of directors in Rupert's absence while Bernard Fornas and Richard Lepeu, who took over as co-CEOs in April, and Chief Finance Officer Gary Saage will manage the day-to-day business, Rupert said in a statement on Thursday.
Richemont, where the 62-year-old South African has been calling the shots ever since he founded the company in 1988, has seen a series of management changes in recent months, which follows the announcement last November that Rupert would be giving up his role as chief executive to Fornas and Lepeu from April.
"After 25 years, I think I have the right to just take a break," he told a conference call with reporters on Thursday, adding that he fully trusted those who will run the firm in his absence.
Meanwhile Richemont said its sales growth accelerated to 12 percent in April from 9 percent in the full year ended March despite a slowdown in Asia and continued uncertainty in the world economy. However, it said that April's growth should not necessarily be taken as an indication of the trend for the full year.
The maker of Cartier watches and jewellery, which pre-released full-year results last month said it viewed the future "with a degree of optimism" and proposed a substantial hike in its dividend to one Swiss franc per share, up from 0.55 francs a year ago.
"Current trading in April is very encouraging," Exane BNP Paribas analyst Luca Solca said. The announcement regarding Rupert was less positive, he said. "But the company is in good hands."
Richemont has been grappling with weak demand in the important Chinese market, where customers buy fewer expensive timepieces as gifts for business partners since the government started a broad-based anti-corruption campaign.
Growth in the important Asia-Pacific region, where Richemont generates 41 percent of group sales, slowed to 5 percent in the year ended March from 46 percent a year ago.
Sales for the year rose 9 percent to 10.1 billion euros and net profit rose 30 percent to 2.0 billion euros.
Shares in the group, which were boosted by more than 12 percent following the pre-release of full-year results in April, trade at about 16.7 times estimated earnings for the next 12 months, in line with peer Swatch Group, but at a discount to its bigger rival LVMH at 17.7 times.
Swatch Group has recently benefited from its larger exposure to lower-priced watches with brands such as Longines and Tissot brands that are still seeing double-digit growth rates in China.
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