Luxury group Cartier-owner Richemont has today announced a rejig of its top management, promoting the head of its Van Cleef & Arpels jewellery brand to group chief executive, saying it was returning to a more traditional management set-up.
Nicolas Bos, who has led a sales surge at Van Cleef, will take over from Jerome Lambert, who will stay on at Richemont as Chief Operating Officer.
The Swiss-listed company made the announcement as it reported a smaller than expected fall in fourth quarter sales. It shares rose 6% on the Zurich exchange.
Chairman Johann Rupert said that the company was reinstating the traditional CEO role, folding the jewellery brands into the rest of the role's responsibilities, which also covers high-end Swiss watches, fashion and accessories.
He noted it was important to be led by an executive from the "client-facing side".
"If you're going to run Richemont you’d better understand the consumer" Rupert told analysts, who were enthusiastic about the promotion.
"Nicolas has developed Van Cleef & Arpels into a power house, and, in our view, is entirely credible as the future leader of the Group," said Bernstein analyst Luca Solca.
The announcement came as Richemont, whose Swiss watch brands include Piaget and Jaeger-LeCoultre, said sales fell 1% to €4.80 billion in the three months to the end of March.
In constant currencies, sales rose 2%,which was a slowdown from the 8% rate in the previous quarter but was slightly ahead of a consensus forecast for €4.78 billion cited by RBC.
The performance confirmed a downward trend in the luxury sector which has been buffeted by tepid Chinese demand and comparisons with last year, when the lifting of Covid-19 curbs in China supercharged sales.
Globally, customers have also become more selective about expensive purchases as the costs of living rises.
"Overall a decent set of numbers and final quarter constant currency growth is reassuring given the souring sentiment among luxury goods buyers and a difficult comparable," said Jon Cox at Kepler Cheuvreux.
However, weakness in the Asia Pacific in the final quarter, down 12%, is worrying, he added noting that unless the China consumer comes back, demand for luxury goods is going to be more muted for the industry than otherwise expected.
Rupert said he was convinced the Chinese market would eventually recover, but could not say when.
"There's nothing wrong with the market I think the people were psychologically affected by the very strict lockdowns and that's why we said it's going to take longer," Rupert told reporters.
Rupert said that he was not reducing his role in the luxury company.
For the full year to the end of March, Richemont's sales rose 3% to €20.62 billion, while shareholders' full-year net profit of €2.36 billion missed the €3.09 billion in the consensus compiled by Visible Alpha.
Profit was hit by a €1.1 billion loss, mainly caused by a big write down in the value of assets at online fashion retailer Yoox Net-A-Porter (YNAP).
Richemont said talks were ongoing with potential buyers for the business, and said it would say more before the end of the year.
The Swiss-based company last December scrapped an agreement to sell part of YNAP to online luxury retailer Farfetch Holdings and is seeking a new partner for the ecommerce platform.
