LONDON - Compagnie Financiere Richemont SA, parent of luxury goods companies including Cartier, Chloe and Van Cleef & Arpels, said it would proceed with its plan to create two separate businesses – a luxury goods business and an investment vehicle listed on the Luxembourg Stock Exchange.
It means that 90 percent of Richemont’s 19 percent stake in British American Tobacco will be distributed to Richemont’s shareholders as warrants for shares in a new investment vehicle called Reinet. The company’s remaining shares in BAT will be held by Reinet with Johann Rupert as chairman and the company will be controlled by Rupert family interests.
Compagnie Financiere Richemont will become a business focused solely on luxury goods and continue to be listed on the Swiss Stock Exchange, while Richemont SA will be named Reinet Investments S.C.A, and will be listed on the Luxembourg Stock Exchange.
Richemont decided to restructure its business after a change in Luxembourg tax legislation: Without the restructuring the company would have to pay a 15 percent tax on dividends from the BAT stake to shareholders after 2010. Richemont’s stake in BAT is currently held through a Luxembourg investment vehicle, and it accounts for its interest in BAT as an associated company.
“The proposals…separate the luxury business from the investment holding activities and establish Compagnie Financiere Richemont as a focused, Swiss luxury goods company,” said Rupert, executive chairman of Richemont, in a statement. “CFR will continue as a significant global company in its own right and will have a strong balance sheet with the financial resources to allow it to grow both organically and, potentially, through acquisitions.”
Richemont said that the changes mean that shareholders will be able to trade their investment in Richemont’s luxury goods business and British American Tobacco separately, and that the separation would limit any holding company discount in Richemont’s share price.
Richemont’s share price rose 2.82 percent to 63.75 Swiss francs, or $59.18, during morning trading on the Swiss Stock Exchange Friday following the news. Richemont shareholders will be able to subscribe for shares in Reinet using their British American Tobacco shares, or to sell their shares on either the Luxembourg Stock Exchange or the Johannesburg Stock Exchange.
Richemont said that Compagnie Financiere Richemont’s net income will be reduced by the elimination of the equity contribution of BAT, but that impact won’t come during the current financial year. The two separate companies will begin to trade October 21, pending shareholder approval.
“[The luxury goods division] today … is in such good shape that we feel comfortable to leave it as a pure luxury goods company,” said Rupert during a conference call Friday.
“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