default-output-block.skip-main
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

Richemont Chairman Warns Company Must Be Cautious With Cash

Johann Rupert said the pandemic hit the watch and jewellery maker's cash flow, making it necessary to halve its dividend to 1 Swiss franc per share.
Cartier store | Source: Shutterstock
By
  • Reuters

ZURICH, Switzerland — Luxury goods group Richemont must manage its cash even more carefully this year in light of the ongoing Covid-19 pandemic, its chairman said on Wednesday, explaining why the Cartier owner slashed its dividend proposal.

Swiss watchmakers have seen sales collapse during the pandemic as the Chinese, their biggest customers, were no longer able to travel abroad to their favourite shopping destinations and stores around the world closed.

Richemont Chairman and controlling shareholder Johann Rupert said the crisis had badly affected the watch and jewellery maker's cash flow, making it necessary to halve its dividend to 1 Swiss franc per share.

"Even at this stage at the end of August, we're still not clear as to when we'll see a therapeutic or a vaccine so we still err on the side of caution in terms of cash," he said in a call ahead of the annual general meeting due to take place in two weeks.

Rupert also said the company would make more changes to its board of directors — and would have launched the changes this year if it hadn't been for the pandemic. The overhaul is designed to update the group's business model, notably in the digital space.

Richemont decided to hold its AGM without the physical presence of shareholders this year due to rising Covid-19 infection rates in Geneva, where it usually holds the event.

Some rival watch brands are, however, gathering for an industry event in the city this week.

Richemont said last month the Covid-19 pandemic had severely disrupted its business, leading sales to almost halve in the three months to June. It had also cut its dividend for 2019/20, but plans to give warrants to shareholders under a loyalty scheme to be approved on September 9.

Citi analyst Silky Agarwal said in a note last week he was cautious the Swiss watch industry's prospects, citing the risk of production over-capacity, lack of innovation and reluctance to embrace new technology.

By Silke Koltrowitz; editor: Thomas Seythal

In This Article
Topics
Organisations

© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

More from Luxury
How rapid change is reshaping the tradition-soaked luxury sector in Europe and beyond.


Mytheresa may not be leaps above its struggling online luxury peers, but its sales and profit growth are still modest. The company is betting that appealing to top spending clients will keep it from suffering the same fate as its competitors.


Founder and creative director Catherine Holstein has learned firsthand that with great success comes even greater scrutiny. At her downtown Manhattan office, she opened up about what drives her designs, what’s next for the buzzy label and why she’ll never leave New York.


view more

Subscribe to the BoF Daily Digest

The essential daily round-up of fashion news, analysis, and breaking news alerts.

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
BoF Professional Summit - New Frontiers: AI, Digital Culture and Virtual Worlds - March 22, 2024
© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions, Privacy Policy, Cookie Policy and Accessibility Statement.
BoF Professional Summit - New Frontiers: AI, Digital Culture and Virtual Worlds - March 22, 2024