Richemont bets on Dufry to deliver in automated future
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Richemont bets on Dufry to deliver in automated future

If you’re inclined to listen to Johann Rupert – and many people in the luxury world are – then Dufry is poised for long-term growth over the next few decades. Rupert is the owner of giant luxury conglomerate Richemont, the company behind brands like Cartier, Dunhill, Montblanc and more. And he’s so sure that Dufry has what it takes to prosper, he’s pumping hundreds of millions of dollars into acquiring a stake in the business.

Dufry’s share price has risen by 34% so far this year

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SOURCE: Yahoo Finance

Earlier this month, Richemont declared a 5% stake in Dufry – worth around $470 million – gaining exposure to what it believes will continue to be a lucrative industry in the coming decades. Richemont is not the only luxury powerhouse interested in the travel retail world – LVMH owns the DFS duty free chain.

Rupert’s justification for the purchase is, somewhat unexpectedly, based on the “Second Machine Age” theories of MIT professors Erik Brynjolfsson and Andrew McAfee. This theory predicts social and economic upheaval as automation puts a large swathe of the population out of work permanently. As a result, according to Rupert, those who can afford leisure will now have more time to devote to it:

“Man will have more free time,” he told reporters in May. “What are we going to do in 15 to 20 years time? Will they all play virtual reality games, will they be on Xboxes? I suspect travel will increase. Will people travel again? The answer is yes, especially in the Second Machine Age. We’ll have vast societal changes.”

Disclosure

Dominion holds both Richemont and Dufry in its Global Trends Luxury Fund.


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