LONDON — Johann Rupert is taking more hands-on control of Compagnie Financière Richemont SA.
In April, Rupert, Richemont’s executive chairman and shareholder of reference, will take over as interim chief executive officer to guide the luxury firm, parent of brands including Cartier, Dunhill and Chloé, across what he expects to be a rocky road.
Sales in October, the first month of the crucial holiday third quarter, were down 10 percent worldwide, with the exception of Asia-Pacific, where they rose 11 percent — and Rupert isn’t pinning his hopes on a recovery any time soon.
“We remain cautious as to the sustainability of the improving economic outlook that we are seeing today, and are prepared for a long recovery process,” he said in an interim statement Friday, adding, “We will continue to plan for difficult market conditions.”
He also stressed Richemont was very exposed to currency fluctuations, and especially the weakening of the dollar and yen against the euro. “These currency trends will have a negative impact on the group’s results for the second half of the year,” he added.
Richemont executives said in a conference call Friday the outlook for Christmas was “difficult to predict,” and that Richemont was, like most companies, at the mercy of the end consumer.
During a separate conference call with analysts, Rupert said he would serve as interim chief executive officer, replacing Norbert Platt, who will retire on March 31 due to health issues.
The low-profile but hard-charging Rupert didn’t specify how long he’d remain in the ceo job, but made clear he didn’t want an outsider taking over during this critical time, and felt he needed to assume a more direct role in guiding Richemont — at least until the economy improves.
Rupert served for nine months as Richemont’s ceo in 2004, just before he appointed Platt to the role and while the company was coping with the impact of SARS, the war and occupation in Iraq, and the re-structuring of the ailing Dunhill and Lancel businesses.
Overall, analysts welcomed Rupert’s decision to take over day-to-day operations. “It seems a sensible decision, and it’s fine as long as it’s a temporary measure,” said one London-based financial analyst.
Another analyst said Richemont’s two big challenges going forward would be top-line recovery in the short-term, and continued cost cutting once the business starts to grow again.
On Friday, Richemont reported a 60 percent fall in profits to 344 million euros, or $481.6 million, from 860 million euros, or $1.2 billion, in the six months to September 30.
The company said the 2009 first half comparisons were particularly harsh, as Richemont had achieved record sales and profits during the corresponding period in 2008.
The decline in profits was due to a double-digit drop in sales across all product categories, and to extraordinary gains from the firm’s share in British American Tobacco last year. Richemont has since become a pure luxury goods firm, and no longer has a stake in BAT.
Stripping out the extraordinary items, profits in the six-month period would have fallen 36 percent.
Sales in the six-month period fell 14.9 percent to 2.38 billion euros, or $3.33 billion, from 2.80 billion euros, or $3.92 billion. Sales fell across all regions, with the exception of Asia Pacific, where they rose 6 percent in the period.
Cartier sales declined more drastically at wholesale than at retail, while bridal jewelry and high jewelry watches remained resilient. In the watch category, where sales fell 17 percent, Vacheron Constantin proved the most robust brand, while Baume & Mercier was the biggest victim of a reduction in wholesale orders.
In the conference call, Platt said most of Richemont’s watch brands were “too widely distributed” and the company would be taking a look at reducing the number of third-party watch dealers.
He added the group was mulling opening Richemont-owned, stand-alone watch stores “to promote the image of the watch brands” in major cities worldwide.
With regard to other strategy shifts, Platt pointed to the revival this week of Les Must, Cartier’s entry-price collection first launched in the Seventies. Although the designs are completely different from those of 30 years ago, the concept is similar.
“This is a ‘welcome line’ to induce people to come into the stores, especially in the U.S. where traffic has been down tremendously,” he said. The collection of jewelry, watches and small leather and silk accessories is stocked at Cartier stores worldwide. Prices range from 45 pounds, or $75, for a goatskin business card holder to 1,500 pounds, or $2,500, for a pink gold and pink tourmaline pendant.
At Richemont’s fashion and accessories division, sales at Dunhill and Lancel were flat, and those at Chloé were down in the period. Richemont did not comment on the performance of its other brands — Shanghai Tang, Maison Alaïa or Purdey.
One of the only bright spots was Asia-Pacific: Platt said he’s not even calling it an emerging market anymore. “China, Russia, the Middle East — these are no longer emerging markets,” he said. “For us, they are growth markets.”
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast