LVMH’s Bernard Arnault emerges as personal stakeholder in Richemont

Bernard Arnault, the billionaire founder of luxury goods group LVMH, has bought shares in Richemont, the rival Swiss-based conglomerate behind high-end jeweller Cartier.

The stake is too small to be disclosed in public registers and is a personal investment by Arnault, one of the world’s richest men, two people familiar with the matter said. It is a holding among many other stocks owned by the family and does not signal any particular move on Richemont, they added.

LVMH and Richemont declined to comment.

The investment could nevertheless revive speculation about possible takeover scenarios among big luxury groups, especially as Richemont, controlled by 74-year-old South African billionaire Johann Rupert, is gearing up for a succession challenge.

Cartier has long been one of the most attractive Richemont assets, one of a rarefied circle of very top brands that LVMH would be interested in if it ever came on the market, people at the world’s largest luxury group have acknowledged in the past. LVMH separately announced a new acquisition in the world of watches and jewellery on Tuesday (Jun 25), that of Swiza, the owner of ornate desk clock maker L’Epee 1839, for an undisclosed sum.

Arnault completed a US$15.8 billion (S$21.4 billion) acquisition of US brand Tiffany in 2021 — which has collaborated with L’Epee 1839 since on a racing car-shaped clock — as he added to LVMH’s jewellery stable, regarded as a potential growth area. It also includes Bvlgari, though the group’s biggest revenue driver remains fashion and handbag maker Louis Vuitton.

Richemont has also drawn interest from LVMH’s French rival Kering, which had tried to approach the Swiss group with a tie-up plan but was rebuffed.

Rupert has long insisted on wanting to preserve Richemont’s independence and recently overhauled the group’s management, by appointing a new chief executive, Nicolas Bos, who formerly ran its Van Cleef & Arpels brand.

It was not immediately clear when the Richemont shares were purchased. Bloomberg first reported news of Arnault’s stake, saying the French billionaire intended to hang on to it as an investment.

Richemont shares are up about 24 per cent this year and rose about 2.8 per cent on Tuesday, though have come off highs reached last July as the luxury sector grapples with worries over weaker demand in the important Chinese market.

LVMH shares are broadly flat since the start of this year, having taken a hit in the past fortnight as jitters over a looming legislative election in France and the rise of the far right roil the stock market.

Arnault, 75, is known as a canny dealmaker who has used stealth before to try and get closer to his targets. He stunned Hermes, the maker of luxury Birkin handbags, in 2010 when it suddenly transpired he had built up a large stake through derivatives and using intermediaries, which eventually grew to more than 23 per cent.

Arnault had insisted at the time that he had no intention to take control of Hermes, whose family backers fought back, and the stake was distributed to LVMH shareholders in 2014.

In an interview with Bloomberg published on Tuesday (Jun 25), Arnault shrugged off questions about future acquisitions, saying he had “ideas for the future” and evoking unnamed brands that would fit well within LVMH, but adding: “We don’t need to do it.”

Additional reporting by Adrienne Klasa

Sarah White and Leila Abboud © 2024 The Financial Times

This story first appeared in The Financial Times