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Richemont Reintroduces CEO Role, Appointing Jerome Lambert

The luxury group scrapped the chief role a year and a half ago and appointed a senior executive committee to manage the group.
Source: Richemont
  • Bloomberg

GENEVA, SwitzerlandRichemont's controlling shareholder, Chairman Johann Rupert, is giving more control to longtime company insider Jerome Lambert as part of a gradual changing of the guard at the Swiss luxury-goods maker.

Richemont promoted Lambert to chief executive officer as the company held its annual general meeting Monday in Geneva, where shareholders re-elected the chairman’s son Anton to start his second year on the board.

The South African billionaire said that Lambert will be “first among equals,” leading strategic development. He will work alongside the CEOs of its jewelry brands Cartier and Van Cleef & Arpels, who will continue to report to the board separately.

Rupert, 68, is moving further away from day-to-day affairs at Richemont just as questions of succession loom over other aging titans of the luxury industry, including LVMH's Bernard Arnault and Prada SpA's Patrizio Bertelli. The new Richemont CEO will need to navigate a difficult market for high-end watches and help determine what to do with the company's $6 billion cash pile as e-commerce increasingly penetrates luxury.

‘Strong Focus’

“Strong focus on the digital channel is becoming critically important,” Johann Rupert said during the shareholder meeting.

The stock rose as much as 2 percent in early Zurich trading after the company also reported better-than-expected revenue.

The Lambert appointment comes about two years after Rupert abolished the CEO position, saying he considered the company, whose brands include Montblanc pens, Chloe fashions and Purdey luxury shotguns, too big for one person to manage.

Having worked more than two decades at the company, Lambert has cut out middlemen for brands such as Jaeger-LeCoultre and expanded Richemont’s own boutiques, while gaining Rupert’s confidence. He was named chief operating officer last year and has taken part in difficult decisions such as buying back excess inventory amid a glut of timepieces.

“The announcement of a seasoned Richemont executive as CEO should alleviate concerns that the group was at risk of being run as a federalized state of brands with no head,” wrote John Guy, an analyst at MainFirst.

Ego Control

Richemont’s management has been in flux for several years as Rupert, who once called himself an “air traffic controller of egos,” replaced an older generation of managers. Georges Kern, who had been seen as another possible CEO candidate, left the company last year to lead watchmaker Breitling.

Rupert said last year that his son Anton, who is in his early 30s, won’t have an executive role but will supervise and serve as a link between the controlling family shareholders and managers of Richemont. Johann Rupert said at the time that it was time to hand more responsibility to a younger group of executives, though “the orchestra still needs a little bit of conducting.”

Separately, Richemont reported Monday that revenue increased 10 percent excluding acquisitions and currency shifts in the five months through August, ahead of analysts’ estimates. Watchmaking lagged with single-digit growth as Richemont works to slim down its distribution network, ending sales to some third parties to make its timepieces more exclusive.

Watchmakers are also facing increased competition from online markets for secondhand and vintage timepieces. Richemont has opted to enter the business, buying out luxury e-commerce company Yoox Net-a-Porter SpA for 2.7 billion euros ($3.1 billion) this year as well as Watchfinder, a leading U.K. site that resells watches.

Lambert, born in 1969, started in finance at Richemont’s watch division Jaeger-LeCoultre in 1996.

Rupert himself had three stints as CEO of Richemont, returning to the job twice to navigate the company through industry crises.

“We very much welcome the CEO announcement,” said Rene Weber, an analyst at Bank Vontobel in Zurich. “Leadership is now clear.”

By Corinne Gretler and Thomas Mulier, with assistance from Robert Williams; editors: Eric Pfanner, John J. Edwards III and John Lauerman.

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