LONDON — The activist hedge fund Bluebell Capital Partners has Compagnie Financière Richemont in its sights, and is demanding more representation for holders of the publicly listed “A” shares on the board of the luxury giant.
Richemont issued a statement Tuesday confirming that it has received requests from Bluebell for the inclusion of certain items on the agenda of the company’s annual general meeting in September.
Bluebell wants Richemont to designate a representative of the holders of the company’s “A” shares, and the election of that representative to the company’s board.
There are 522 million “A” shares and 522 million “B” shares in issue. The “A” shares are listed and traded on the SIX Swiss Exchange, while the “B” shares are not listed, and are held instead by Compagnie Financière Rupert, which belongs to Johann Rupert.
Rupert is the founder and chairman of Richemont. He controls 10 percent of the company’s capital, and holds 51 percent of its voting rights.
Richemont said Bluebell is further requesting that the company’s articles of incorporation be amended to increase the minimal number of Richemont board members to six, and the requirement that each of the “A” and “B” shareholders have an equal number of representatives on the board.
Richemont said the proposals will be submitted to shareholders at the AGM on Sept. 7. It said the company’s board is “considering the proposals and will communicate its recommendations on this subject in due course.”
While some of Richemont’s board members own “A” shares, there is no specific representative of “A” shareholders currently on the board.
According to Swiss law, in companies where there is more than one class of share, each class is entitled to have at least one representative on the board of directors. Richemont’s own articles of association say that holders of “A” shares and “B” shares each have the right to appoint one representative to the board.
It is understood that, until now, no request had been made by a shareholder to exercise that right of the “A” share class to appoint a representative.
Bluebell Capital did not return a request for further comment.
Shares in Richemont were up 3 percent at 105 Swiss francs in early afternoon trading, and closed the day up 4 percent at 106 Swiss francs.
Richemont isn’t the first major corporate to come under pressure from the London-based Bluebell Capital, which over the past years has targeted companies including Danone, GlaxoSmithKline and Hugo Boss.
Bluebell isn’t just any activist hedge fund. It was cofounded by the luxury jewelry expert Francesco Trapani, who has also served as the company’s chairman. He is also the former CEO of Bulgari, and sat on the board of Tiffany & Co. before that company’s purchase by LVMH Moët Hennessy Louis Vuitton.
Although Trapani has stepped back from management at Bluebell, his cofounders and the team will have gained great insight into how luxury jewelry companies function.
This is at least the second time that Richemont has been pursued by an activist investor. A few months ago, Richemont jumped more than 5 percent following reports that activist Daniel Loeb’s hedge fund Third Point was taking a close look at the luxury giant.
Some reports said Third Point had taken a stake in the company, while others said the activist made some inquiries. The furore quickly died down.
As reported, while activist investors can certainly make noise around Richemont, they will always have to square off with Rupert, who remains deeply involved with the business.
Financial sources have repeatedly told WWD that with Rupert in charge, there is a limited amount that any activist investor can do. Richemont is different from other activist situations as Rupert has more than the majority of votes.
In the fiscal first quarter, Richemont posted double-digit revenue gains across all product categories and regions, except for Asia Pacific. It achieved the results against an uncertain economic backdrop plagued by surging inflation, ongoing supply chain problems, and the impact of lockdowns in China.
At actual exchange rates, sales rose 20 percent to 5.26 billion euros. At constant rates, they were up 12 percent in the April to June period.
The parent of Cartier, Van Cleef & Arpels and Chloé said the U.S. became its largest single market in the three-month period, with sales climbing 41 percent to 1.34 billion euros due to domestic spending.