Swiss luxury group Richemont overhauls chief executive role as it navigates market downturn

Richemont has appointed a new group chief executive and overhauled the role as the Swiss luxury group navigates a market downturn.

The group, which is chaired by its controlling shareholder Johann Rupert, said Nicolas Bos, the head of its jewellery brand Van Cleef & Arpels, would take up the position on Jun 1. He will report to Rupert and oversee all of Richemont’s brands and regions.

“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,” Rupert said. “The re-established CEO role will help streamline decision making and optimise operational management.”

Richemont already has a chief executive, Jérôme Lambert, but his role has a more limited remit than the one Bos will take on since the heads of top brands including Cartier and Van Cleef, and the group’s head of finance, did not report to him. He will remain on the board and become chief operating officer.

Rupert, 73, also said that Cartier chief executive Cyrille Vigneron, 63, was working with him to identify and prepare his succession as he approaches retirement age. Cartier is viewed as the jewellery industry’s leader and is Richemont’s biggest brand, accounting for the majority of sales and profits.

He added that overhauling the CEO role had been under discussion for several years, but that crises, including the COVID-19 pandemic, had interceded.

“I’m not stepping back, but I’m asking Nicolas to assume some of the direct line reporting that I used to execute that I thought was cumbersome,” he told reporters.

Bos joined the group more than three decades ago. He started at Van Cleef in 2000, before rising through the ranks to become president and chief executive in 2013. He has also overseen jeweller Buccellati since 2019.

“Nicolas has proven himself in operating Van Cleef and building Van Cleef into a proper powerhouse,” Rupert said.

The shake-up came as Richemont reported slower sales in the fourth quarter as the luxury industry navigates a weaker market after a multi-year boom.

“With Nicolas Bos appointed to group CEO, Jérôme Lambert becoming COO, and a new deputy chairman, discussions around succession might resurface,” wrote Thomas Chauvet, analyst at Citi.

“Weaker fourth-quarter jewellery maisons and second-half margins were offset by specialist watchmakers and fashion brands [doing] not as bad as feared,” he added. “We see Richemont as a fundamentally stronger business than during prior industry downturns.”

Shares in Richemont were up 5 per cent in early trading on Friday (May 17).

Fourth-quarter revenues at the group grew 2 per cent at constant exchange rates to SFr4.8 billion (US$5.3 billion), ahead of consensus expectations compiled by Bloomberg. While the performance in Asia, excluding Japan, was weaker, with sales falling 12 per cent in the quarter, other regions including Europe, the US, Japan and the Middle East accelerated.

“Two years ago I said that China is going to take longer to return to normality,” Rupert said. “The Chinese will recover . . . however, I think there was a drop in confidence and in the social contract because of the scars left by the lockdowns of Covid.”

Sales at its jewellery brands, its biggest division that is home to Cartier, Van Cleef and Buccellati, had sales in line with expectations, according to estimates compiled by Barclays, growing 3 per cent in the quarter.

Full-year sales of SFr20.6 billion also matched forecasts, growing 8 per cent at constant exchange rates, although group earnings before interest and tax of SFr4.7 billion came in below expectations.

Adrienne Klasa © 2024 The Financial Times