Cartier CEO Cyrille Vigneron Says Jewelry Flagships Shouldn’t Be ‘Department Stores’
Richemont, the Swiss parent company of brands like Cartier and Van Cleef & Arpels, reported record operating profits today (April 12), joining other companies in the luxury sector who have recently benefited from China’s relaxed Covid policies.
The luxury conglomerate’s operating profits increased by 34 percent to 5 billion euros ($5.5 billion) in the past year ending in March.
“The final quarter recorded a significant sales increase as sales in Asia Pacific resumed growth following the removal of travel and health restrictions in mainland China,” said Johann Rupert, chairman of Richemont, in a statement accompanying the earnings.
Rupert also discussed recent advertising scandals at Balenciaga and against Bud Light during his company’s earnings call, claiming they would never have occurred at Richemont. “It’s not our role to be social adjudicators,” he said. “Don’t go pick low-hanging fruit, just grow within yourself and keep the brand’s equity top of mind.”
Richemont denies acquisition rumors
The South African executive additionally shut down rumors that Richemont would be taken over by rival luxury company LVMH after whispers of a potential acquisition made headlines earlier this year.
He said that despite having frequent discussions with LVMH chairman Bernard Arnault, Richemont was not for sale. “We’re in constant dialogue and we respect each other’s independence,” he said, as reported by Bloomberg.
Rupert also appeared to dismiss the recent opening of LVMH’s renovated flagship Tiffany store in Manhattan, which features ten stories of retail space and a Blue Box Café from Daniel Boulud. “I am a skeptic about taking a maison’s name and giving it food and beverage,” he said during the earnings call when asked about the growing trend of brand flagships with amenities like cafes and artwork.
“We don’t believe that luxury jewelry should become a department store, some believe differently,” added Cyrille Vigneron, CEO of Cartier, before Rupert interjected by saying, “Don’t go that far.”
LVMH and Richemont have long been rivals
Both Rupert and Arnault, currently the world’s richest person, founded their respective conglomerates in the 1980s. Rupert formed Richemont in 1988 with assets from the Rembrandt Group, which his father Anton Rupert created in 1948, while the beginnings of LVMH were born in 1984 with Arnault’s acquisition of Christian Dior.
With a market capitalization of $443 billion, LVMH, which manages 75 brands including Louis Vuitton, Tiffany and Christian Dior, is currently the most valuable company in the luxury sector. Richemont owns around 50 fewer companies and has a market capitalization of $88 billion, with a much narrower focus on jewelry and watches.
The two billionaires have also kept their business within the family. All of Arnault’s five children have executive roles throughout LVMH, while Rupert’s family holds a controlling stake in Richemont.
Conflict arose between the rival European companies in August when activist investor Bluebell Capital proposed the appointment of former Bulgari CEO Francesco Trapani to Richemont’s board. Trapani was CEO of Bulgari when it agreed to an acquisition from LVMH in 2011, later serving on LVMH’s board of directors and as CEO of its watches and jewelry division.
Rupert described Trapani as an “inappropriate candidate” due to his “long history of close relationships with the LVMH group and its main shareholder,” in a letter to shareholders, who later voted against the appointment. “LVMH is one of our company’s key competitors,” he said.