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UPDATE 3-Richemont names new joint CEOs as growth slows
2012年11月9日 / 早上6点47分 / 5 年前

UPDATE 3-Richemont names new joint CEOs as growth slows

* Cartier head Fornas and deputy Lepeu to be joint CEOs

* Sales growth slows to 7 pct in Oct from 12 pct in H1

* H1 net profit rises to 1.08 bln euros, beats 1.04 bln forecast

* Shares down 1.4 percent

By Silke Koltrowitz

ZURICH, Nov 9 (Reuters) - Richemont appointed two veteran managers as joint chief executives on Friday, to help founder and controlling shareholder Johann Rupert steer the luxury goods group through a period of slowing sales growth in its important Asian markets.

65-year-old Cartier chief Bernard Fornas and 60-year-old deputy chief executive Richard Lepeu will take over from Rupert as chief executive in April next year, while Rupert, aged 62, will remain in his other role as executive chairman.

“This company is far too complex and too big for one individual to run,” said Rupert, who took over as chief executive two years ago when Norbert Platt bowed out due to ill health.

The announcement came as the world’s second largest luxury goods group after France’s LVMH reported a slowdown in sales growth to 7 percent at constant exchange rates in October from 12 percent in its first-half period which ended Sept. 30.

The group made no comment on its trading outlook, saying only that good growth in Europe supported by Asian tourists is compensating for slower domestic Asia Pacific sales.

“We still saw growth in all regions in October,” Chief Financial Officer Gary Saage told reporters in a call.

Sales growth in the global luxury market is set to slow sharply this year, to 5 percent from 13 percent in 2011, as Chinese and European customers rein in spending, consultancy Bain & Co and luxury goods trade body Altagamma said last month.

LVMH has seen sales growth slowing this year, and Burberry and PPR’s Gucci have warned of tough trading in growth market China.

Richemont said overall growth in the Asia-Pacific region, which accounted for 41 percent of group sales in the first half, was “normalising” after two exceptional years. Growth in the region dropped back to 9 percent in the first half from 60 percent in the same period last year.

But Saage said China’s change of government this month should dispel the uncertainty that has been hanging over trading in the group’s third biggest market.

Meanwhile first-half sales in Europe, its second biggest region behind Asia-Pacific, were up 19 percent. Total group sales rose 12 percent to 5.1 billion euros.

“Asia Pacific and Americas appear to have declined to mid single-digit growth rates in September and October, which might raise eyebrows,” Kepler Capital Markets analyst Jon Cox said.

“I think the slowdown is temporary and we certainly aren’t seeing a repeat of 2007-8. Post-elections in the U.S. and China, I suspect sentiment will improve,” he said.

Richemont shares, which have risen 35 percent so far this year, were down 1.4 percent at 63.40 francs by 1138 GMT, underperforming a flat Stoxx Europe 600 sector index.

The shares are trading at around 14 times prospective earnings for its fiscal year ending March 2014, broadly in line with rival Swatch Group, but at a discount to LVMH at around 16 times estimated 2013 earnings.

First-half net profits at the maker of Cartier watches and Montblanc pens soared 52 percent to 1.08 billion euros, helped by a stable euro-Swiss franc exchange rate and beating the average forecast of 1.04 billion euros given in a Reuters poll.


The appointment of Fornas and Lepeu as co-CEOs means the longer term succession plan remains open.

“The new solution is certainly not for 10 years, but rather for about three years. Until then, the younger managers can show what they are capable of,” said Rene Weber, analyst at Vontobel.

The appointment was foreshadowed by Fornas stepping down as Cartier’s CEO in March to continue in “a senior management role within the group”. Fornas, Lepeu and financial chief Gary Saage will form a senior executive committee, Richemont said.

“Nothing much changes. This company has always really been run by a troika,” he said. Executive chairman since 2002, Rupert also wore the two hats of chairman and CEO the following year to steer the company through a difficult period.

“The joint-CEO role is an exception in the corporate world and probably a sign that leadership will remain in the hands of chairman Rupert,” analysts at bank Sarasin said in a note.

French-born Bernard Fornas started at Richemont almost twenty years ago as marketing director of the group’s flagship Cartier brand where he worked closely with Richard Lepeu, another Frenchman, who was named Cartier CEO in 1995.

Fornas has held the top job at Cartier since 2002, overseeing the jewellery brand’s geographical expansion into new markets in Asia. He is handing over in January to Van Cleef & Arpels chief Stanislas de Quercize.

Richemont also on Friday appointed several new members to its group management committee, among them de Quercize and the chief executives of its Montblanc, Jaeger-LeCoultre, IWC and Piaget brands.

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