Richemont had a lot to share on Friday with the Swiss luxury giant both confirming the slowdown in the luxury sector (albeit with only a 1% sales dip in Q4) and announcing a new CEO for the group.
So first, that CEO news. The company has named Nicolas Bos, currently CEO of its Van Cleef & Arpels operation, to the “re-established role” of group CEO, effective from the start of next month.
And Bram Schot will be Non-executive Deputy Chairman from September, succeeding Josua (Dillie) Malherbe who’s decided to step down after 11 years, although he’ll remain on the board.
Bos will continue to report to Chairman Johann Rupert and the company said that in his new role he’ll “directly and indirectly oversee all the Maisons, functions and regions, notably the Jewellery Maisons, Finance and Human Resources”.
The ESSEC Business School graduate has been with the group since 1992 and joined Van Cleef & Arpels in 2000. He’s been its CEO since 2013 and has also been overseeing Buccellati since 2019.
Jérôme Lambert remains on the board and will continue as COO, reporting to Bos.
Rupert said that Bos was the right person to lead the firm as “his vision and ability to uphold Van Cleef & Arpels’ tradition of excellence and creativity have been critical to the Maison’s remarkable growth. Building on Richemont’s expanded scale and stronger focus on retail and jewellery, Nicolas will steer the group through the next phase of its evolution. The re-established CEO role will help streamline decision-making and optimise operational management”.
He also thanked Lambert “for playing a significant part in strengthening Richemont’s operational backbone and in helping to successfully navigate the Group through turbulent times”.
So what about those Q4 and full-year results? The company said sales fell to €4.8 billion ($5.21 billion) in the three months to the end of March. And while they rose 2% at constant exchange rates (CER), that was slower than the 8% rise seen in Q3. But at least the Q4 numbers were a little ahead of what analysts had expected.
Meanwhile, full-year sales rose 3% to €20.62 billion and shareholder’s full-year net profit was €2.36 billion, which was lower than analysts had predicted.
The group owns a massive array of brands from luxury jewellers Cartier and Van Cleef & Arpels to watchmakers Baume & Mercier and Vacheron Constantin, and fashion labels including Chloé, Alaïa, AZ Factory, Delvaux, Dunhill, Gianvito Rossi, Montblanc, and Peter Millar.
It also still owns Yoox Net-A-Porter but has been seeking ways to divest this for some time. Its deal with Farfetch fell through and it’s “working on finding a new controlling shareholder for YNAP that can best harness its potential”. Discussions are ongoing with potential buyers and it should “be in a position to disclose more before the end of the year”.
We’ve already mentioned the Q4 sales dip and the full-year sales rise. We’re told that full-year figure was driven by the Jewellery Maisons and retail.
It saw sales growth across all regions and business areas on a CER basis with the sales increase led by Asia Pacific (+4% at actual exchange rates and +10% CER) in value terms. Japan was up 8% at actual exchange rates and 20% CER and it said the US is now the largest individual market for the group.
Its strongest channel performance came from retail (+5% reported, 11% CER), with growth across all business areas and regions.
While operating profit fell by 5% to €4.8 billion, it was up 13% CER, generating a 23.3% operating margin.
It saw a “solid” profit for the year from continuing operations of €3.8 billion (which was down 2%) but a €1.5 billion loss from discontinued operations mainly due to a write-down of YNAP assets.
This came as the Jewellery Maisons delivered a 33.1% operating margin, with sales up 6% (+12% CER); Specialist Watchmakers posted a 15.2% operating margin, with sales down 3% (+2% CER); and the ‘Other’ business area that includes fashion suffered a €43 million operating loss overall (the Fashion & Accessories Maisons specifically were at breakeven) on sales slightly lower than the prior year. They were down 2% but up 1% CER.
The company said the F&A performance was “driven by a heightened focus on creativity and higher sales at most Maisons, including double-digit growth at Alaïa. Of note are the ongoing solid development at Peter Millar and Delvaux as well as the acclaimed first collections of new creative directors at Chloé and Dunhill, and the success of higher-priced creations at Montblanc”.
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