Richemont gears up for the 21st Century
Swiss luxury conglomerate Richemont, the powerhouse behind brands like Cartier and Van Cleef & Arpels, has been busily reinventing itself to make the most of the 21st century. The company may have a long history in the upper-end of the luxury sector, but it’s not letting tradition hold it back from making changes that could catapult it out ahead of its rivals.
Richemont’s share price has crept upwards over the last five days
Source: Yahoo Finance
The first big change that Richemont has made is to embrace the online world even more wholeheartedly than before. The conglomerate has taken control of online fashion platform Yoox Net-a-Porter (YNAP), and is using it as a pipeline for a selection of Richemont’s many brands. This transformation is unquestionably digital – but it goes beyond the obvious. The company’s chairman and biggest shareholder, Johann Rupert, recently expressed his thoughts on the matter to reporters, saying:
“We're seeing such rapid change and we better be ahead of that curve. Our goal is to position Richemont that we're ahead of curves. I am talking about a massive change in the way business is being done by going digital, a massive change in Ecommerce. I think everything is changing.”
Embracing the online world isn’t the only nod to younger consumers. As Millennials have come of age (the entire cohort is now into adulthood, and its oldest members are around 40), they have become a hugely relevant consumer segment. Hence, Richemont has launched a brand just for them: Baume.
Richemont has also bought Watchfinder – the world’s oldest reseller of pre-owned luxury timepieces. This is a nascent market that’s garnering more than a little interest – and perhaps more importantly, it offers Richemont the ability to construct a kind of “circular economy” where it can benefit from multiple sales of its products (we’ve discussed this in more depth here).
The last big change Richemont has made is to shake up its senior team. Rupert waved goodbye to eight white men in their sixties, seventies and eighties, and replaced them with nine new board members. Three of those members are in their 40s, one is a Millennial, two of the five non-executive directors are women, and two are Asian. If the future belongs to youth and diversity, then Richemont is in a great place to capitalise.
Dominion holds Richemont in its Global Trends Luxury Fund.
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