PARIS — The coronavirus crisis delayed changes to the board of Compagnie Financière Richemont as well as its business strategy, according to the group’s chairman Johann Rupert.
“It was quite clear that the world was changing long before COVID-19, and that business models needed to be addressed,” he told investors Wednesday in a brief question and answer session ahead of the closed door annual shareholder meeting on Sept. 9, according to a company transcript.
“The new profile of the board must reflect the opportunities and challenges that we’re facing, evolving tastes, consumption habits, digital, Chinese clientele, cyber criminalities, [diversity and inclusion] matters, training needs, change management,” Rupert said.
“So we will be changing the board and we would have started this year but for COVID-19, we need time to also transition the committees,” he continued.
Noting that he had urged caution early on in the coronavirus crisis when it became clear that the group’s cash flow was being “badly affected,” by the drop in consumption, the executive said that at the end of August, there remains uncertainty over when a treatment or vaccine might emerge to prompt consumers to resume traveling and spending money.
“So we will still err on the side of caution,” he said.
Earlier this year, the Cartier owner drew up a loyalty scheme for shareholders, with plans to issue three-year warrants to investors, meant to reward those who hang on to them. The warrants, which can be traded, will be distributed on Sept. 18.
If market conditions return to normal, Rupert said he hopes that shareholders will recover funds lost due to a 50 percent cut in the previously planned dividend.
“By the way, I also cut my salary by 50 percent because we’re all in it together,” he said.
“If we acted too conservatively, the warrant should be very valuable,” the executive continued. But if the pandemic continues without a vaccine or treatment to reassure consumers, “I think everybody will agree that we acted prudently and conservatively, and in the best interest of all shareholders, colleagues and partners,” added Rupert.
The luxury goods group has been hit hard by the crisis, reporting a 47 percent drop in sales over the three months ending June 30.