Swiss luxury goods group Richemont abandons sale of underperforming brands
09 Nov 2013
Cie. Financiere Richemont SA, the Swiss luxury goods group has abandoned plans of selling its struggling brands such as high-end leather goods unit Lancel and pen unit Montblanc.
Richemont, the world's largest jewellery maker, yesterday said that after conducting a review of Maisons, instead of selling some of its underperforming brands, it will invest further in these brands to assure their long-term prosperity, which includes Cartier jewelry and Chloe accessories.
The company has €3.3 billion in cash reserves.
''Richemont has completed the review of Maisons referred to at the annual general meeting. Further investment in the Maisons will be made, as in the past, to assure their long-term prosperity.
No disposals are under consideration at this time or for the foreseeable future. The the Geneva-based company said it would not comment further on this subject, while releasing its half-yearly results.
Results for the six-month period ended 30 September revealed that Richemont brands Montblanc, Alfred Dunhill, Chloe and its watch component manufacturing facilities had underperformed and weighed on the groups overall business.
In September, Richemont had hired investment bank Nomura Holdings to help sell French luxury leather goods brand Lancel, the maker of Brigitte Bardot handbags, which could fetch it around €500 million ($675 million). (See: Richemont prepares to sell French luxury leather goods brand Lancel)
Richemont, the maker of Cartier jewellery and Piaget watches, had acquired Paris-based Lancel in 1997 for $375 million.
The company's CFO Gary Saage said that although it explored selling Lancel but abandoned the process since potential bidders made offers that undervalued the brand.
Founded in 1988 by South African businessman Johann Rupert, Bellevue, Switzerland-based Richemont is the world's third-largest luxury goods company and the sixth-largest corporation by market capitalisation in the Swiss Market Index.
Richemont designs, manufactures, distributes and sells premium jewellery, watches, leather goods, writing instruments, firearms, clothing and accessories and generates annual revenues of €8.867 billion.
Its brands include several of the most prestigious names in the luxury industry such as Cartier, Van Cleef & Arpels, Piaget, Vacheron Constantin, Jaeger-LeCoultre, IWC, Panerai and Montblanc.
