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Richemont Denies Sale, Spin-off of Brands

According to an internal company memo seen by WWD, there are no disposals or initial public offerings in the cards.

LONDON — Compagnie Financière Richemont, parent of brands including Cartier, Dunhill, Lancel and Chloé, is set to report its first-half results on Friday morning, and there is no doubt that analysts and the press alike will be peppering company principals with questions about possible disposals in the firm’s soft luxury division.

This story first appeared in the November 8, 2013 issue of WWD.  Subscribe Today.

However, according to an internal company memo seen by WWD and signed by Richemont’s chairman and principal shareholder Johann Rupert, there are no disposals or initial public offerings in the cards.

“It has been widely speculated that CF Richemont is planning to sell/dispose of various maisons…We are not going to comment on press speculation but, as the controlling shareholder, it is my pleasure to confirm to you that I have no intention of disposing of any maison. We also have no intention of taking any of our maisons public through an IPO,” the memo read.

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“For over a quarter of a century, our shareholders have benefited from superior returns on their investments. This was achieved by careful planning and nurturing of the Brand Equity of our maisons.

“As the controlling shareholder, I have always supported you, the Heads of the maisons. Our dividend policy has been prudent — preferring to put the money to work inside the maisons.

“Through carefully nurturing our resources we have today over euro 3.8 billion [$5.13 billion] on our balance sheet. Our shareholders expect us to build brand equity and to create goodwill, not merely to buy it. Let us continue to build more great maisons.”

WWD has reported, citing industry sources, that Lancel, Net-a-porter and Chloé are being shopped around. Richemont has denied that Net-a-porter is for sale, and has so far declined to comment on other potential disposals.

Last week, Thomas Chauvet of Citigroup in London published a detailed report in which he said he expects Richemont to make a “complete exit” from fashion and accessories in a bid to refocus on its hard luxury brands. The aim would be to forge a more “homogenous” group that generates higher margins and capital returns.