Today has been an interesting day with the news coming from Richemont regarding some very high-level changes to CEO positions at Cartier and Van Cleef & Arpels; changes that also affect Vacheron Constantin and Jaeger-LeCoultre as of September 1st, 2024. While Catherine Rénier is set to leave her post as CEO of Jaeger-LeCoultre and become CEO of Van Cleef & Arpels, Louis Ferla, currently CEO of Vacheron Constantin will succeed Cyrille Vigneron as Chief Executive Officer of Cartier, effective September 1, 2024.
These surprising changes come right after the news that were published last week on June 25th, 2024 through several sources including Bloomberg, London’s Financial Times, Market Chatter, and MT Newswires just to name a few. Below find excerpts from a couple of them:
“LVMH founder and Chief Executive Officer Bernard Arnault acquired a small personal stake in Compagnie Financière Richemont, London's Financial Times reported Tuesday, citing two people familiar with the matter. The sources said the stake is a personal investment and is too small to be disclosed in public registers and does not indicate an intention to make a move on the Swiss luxury goods company. The publication said the investment could still lead to takeover speculation as Richemont readies for a succession challenge. People familiar with the fashion giant have said in the past that the company would readily acquire Richemont's jewelry business Cartier if it ever came up for sale, according to the report. LVMH and Richemont did not immediately respond to MT Newswires' requests for comment.”
(Bloomberg) - Richemont shares gained as much as 3.1% after being halted following Bloomberg reporting that LVMH's owner Bernard Arnault has built a stake in the Cartier parent company. READ: Arnault Is Said to Have Bought Stake in Cartier Owner Richemont. NOTE: As of 11:22 Richemont shares recouped all losses and gained 3.0% after being halted due to volatility; other luxury stocks also ticked higher; Kering rose 1.1%, Hermes +0.5% and LVMH +0.3%, pushing the STOXX Europe 600 Consumer Products and Services up.
The LVMH Group, a family-run group founded in 1987 by Bernard Arnault, is a multinational luxury goods conglomerate headquartered in Paris, France. LVMH, which stands for Louis Vuitton Moët Hennessy is renowned for its portfolio of 75 prestigious brands spanning six sectors including fashion, jewelry, watches, perfumes, cosmetics, and spirits.
Some of the notable brands under the LVMH umbrella for Spirits include Moët & Chandon, Krug, Veuve Clicquot, Hennessy, Dom Pérignon, Ruinart, Ardbeg, Belvedere, Glenmorangie and Château d’Yquem. Fashion and Leather Goods: Louis Vuitton, LOEWE, Loro Piana, Berluti, Celine, Fendi, Christian Dior, Pucci, Givenchy, Rimowa, Vuarnet, and Kenzo among others; for Perfumes and Cosmetics brands like Aqua di Parma, Givenchy, Guerlain, Maison Francis Kurkdjian, and KVD among others; and Watches & Jewelry includes Tiffany & Co., Chaumet, Fred, Repossi, TAG Heuer, Hublot, Bulgari, and Zenith.
LVMH has solidified its position as a key player in the global luxury market through a combination of exceptional craftsmanship, innovative design, and strategic acquisitions. Therefore, adding Richemont to its portfolio makes a lot of sense and it has been rumored in the industry for a while. In terms of its watch brands, the portfolio at LVMH is composed of strong contenders with a rich history —like Zenith or TAG Heuer— but not at the level of brands like Vacheron Constantin or Jaeger-LeCoultre at Richemont. However, the newly created La Fabrique du Temps is a state-of-the-art horological manufacture by LVMH with a lot of potential to output haute horlogerie quality timepieces that can compete at the highest level.
Meanwhile, the Richemont Group —Compagnie Financière Richemont SA— is a Swiss luxury goods holding company, renowned for its prestigious portfolio of watchmaking, jewelry, and some fashion brands. Richemont operates in three business areas: Jewelry Maisons with Buccellati, Cartier, and Van Cleef & Arpels; Specialist Watchmakers with A. Lange & Söhne, Baume & Mercier, IWC Schaffhausen, Jaeger-LeCoultre, Panerai, Piaget, Roger Dubuis and Vacheron Constantin; and Other, primarily Fashion & Accessories Maisons with Alaïa, AZ Factory, Chloé, Delvaux, Dunhill, Gianvito Rossi, Montblanc, Peter Millar including G/FORE, Purdey, Serapian as well as Watchfinder & Co. In addition, Richemont operates NET-A-PORTER, MR PORTER, THE OUTNET, YOOX, and the OFS division.
Bernard Arnault is a French businessman Founder, Chairman, and CEO of LVMH and according to Forbes the wealthiest man in the world with a fortune surpassing USD 194 Billion. With his keen eye for strategic investments and long-term vision, Arnault is set to further reshape the landscape of the luxury watch industry and that’s where Richemont becomes even more attractive as they own several very important watch brands with high pedigree like Vacheron Constantin —the oldest watch manufacture in the world—, Jaeger-LeCoultre —the watchmaker of watchmakers—, Piaget, IWC, Baume & Mercier, Roger Dubuis, A. Lange & Söhne, and Panerai.
Furthermore, Cartier and Van Cleef & Arpels —although initially founded as jewelry maisons— come with their own very strong watch departments, and if the acquisition were to focus solely on Cartier and VC&A, LVMH would still be strengthening its luxury watch offerings.
While there is some overlapping with LVMH’s portfolio, there are brands that would automatically make LVMH the king in the luxury category if they added Richemont as a whole or even just some of the brands like Cartier and Van Cleef & Arpels.
Watch enthusiasts are eagerly anticipating a potential acquisition and developments that may arise from this significant move in the luxury sector. In my case, I feel very strongly about LVMH acquiring Cartier and VC&A before the end of the year. At this point, we’ll just have to wait and see.
For more info on LVMH click here and for Richemont here.
