Cartier Owner Richemont Names Van Cleef & Arpels Head as New CEO — 2nd Update
By Andrea Figueras
Cartier owner Richemont said Nicolas Bos will replace Jerome Lambert as its chief executive officer, tapping a company veteran who most recently led its French jewelry brand Van Cleef & Arpels as the luxury industry navigates a slowdown in spending.
The change of guard at one of the world's biggest luxury companies underscores how the industry's titans are planning for leadership succession. The CEOs of rivals LVMH Moet Hennessy Louis Vuitton, Kering and Hermes International have been in their roles for a decade or longer.
Bos joined Richemont in 1992 and became global president and CEO of Van Cleef & Arpels in 2013.
Richemont's founder and CEO until 2013, Johann Rupert, remains as chairman.
Lambert will return to the role of chief operating officer that he held before he became CEO in 2018 and will remain on Richemont's board, the company said Friday.
The management changes shouldn't bring significant shifts in the strategic direction of the business, Deutsche Bank analysts Adam Cochrane and Shwetha Ramachandran wrote in a note to clients.
The Swiss jeweler and watchmaker has experimented with its management structure before returning to a more traditional leadership. In 2016, Richemont decided to eliminate the role when former CEO Richard Lepeu stepped down and wasn't replaced. Two years later, the company made an U-turn and appointed Lambert to take the reigns of the group.
The leadership change came as Richemont said it booked sales of 4.80 billion euros ($5.22 billion) for the final quarter of the year ended March 31, down from EUR4.87 billion in the prior-year period. The result compares with analysts' forecasts of EUR4.89 billion, according to a poll of estimates compiled by FactSet.
At 0948 GMT shares traded 5.4% higher at CHF144.85.
The core jewelry division--home to heavyweight brands Cartier and Van Cleef & Arpels--generated quarterly sales of EUR3.34 billion, down from EUR3.36 billion.
Richemont's specialist watchmakers business posted a decline of 4% in sales to EUR841 million. The business appeared particularly resilient amid the current environment, Barclays analysts said in a note, at a time when exports of Swiss timepieces are experiencing a continued slowdown.
The core division came in line with expectations, while the specialist watchmakers business was less bad than feared, RBC Capital Markets analyst Piral Dadhania wrote in a research note.
Analysts had already anticipated a weak start to the year for the luxury sector. The industry experienced a postpandemic boom in sales, but the trend came to an end last year as high interest rates and inflation squeezed consumer spending.
For the fourth quarter, Richemont's sales fell 1% in reported terms compared with the year-earlier period, implying a slowdown from the third quarter, when sales grew 4%. Unfavorable currency effects weighed on sales, the company said.
The wider luxury slowdown has been compounded by sluggish demand in China, which was the industry's biggest market before the pandemic, as the country faces a prolonged downturn in the property sector as well as weak consumer demand.
For the last three months of fiscal 2024, Richemont posted a 16% decline in sales in Asia-Pacific.
"We experienced a softening of sales in the fourth quarter in Asia Pacific against challenging comparatives, which was more than offset by higher growth in all the other regions," Chairman Johann Rupert said. "As we predicted, a sustainable rebound in Chinese demand would take some time."
Full-year operating profit was EUR4.79 billion, down from EUR5.03 billion a year before, while the operating margin fell to 23.3% from 25.2%.
The company is upbeat about its long-term prospects, but remains vigilant amid global uncertainty, Rupert said. It will propose a dividend of 2.75 Swiss francs ($3.03) for each A share.
Write to Andrea Figueras at andrea.figueras@wsj.com
(END) Dow Jones Newswires
May 17, 2024 06:37 ET (10:37 GMT)
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