Johann Rupert’s Swiss luxury conglomerate Richemont has seen a surge in its share price over the past year, reflecting strong financial performance, strategic acquisitions and resilience in a challenging macroeconomic environment.
Richemont, founded in 1988, owns some of the world’s leading luxury brands such as IWC, Jaeger LeCoultre, Montblanc and Panerai.
Over the past year, the group’s valuation rose to 23%. While it climbed to 33.7% in the past six months, it surged 48.8% in three months.
Richemont’s recent rally has been fuelled by its robust financial performance, particularly in the jewellery segment. In January, the group reported robust sales for the holiday and festive quarter, pushing its market capitalisation beyond R2-trillion for the first time.
For the three-month period ended December 2024, the group reported a 10% rise in sales at constant exchange rates, with double-digit growth in all regions except Asia Pacific.
The Americas and Europe were standout markets, with sales growing 22% and 19%, respectively, driven by strong local and tourist demand. Japan and the Middle East and Africa also performed well, posting gains of 19% and 20%, respectively.
However, Asia Pacific saw a 7% decline, mainly due to an 18% drop in sales from Mainland China, Hong Kong and Macau. Despite this setback, Richemont’s core jewellery maisons — led by Cartier and Van Cleef & Arpels continued to perform well, with a 14% increase in sales.
Acquisitions
Beyond organic growth, Richemont has also been expanding through acquisitions. In September 2024, the group completed the acquisition of Italian jewellery brand Maison Vhernier.
In the group’s annual result Rupert said the Traglio family, who acquired Vhernier in 2001, would remain involved in the business and continue to contribute to its growth.
The group has also improved its financial flexibility with net cash reaching €7.9bn (R151bn) by December last year, paving the way for more strategic opportunities.
Over the past three years, the group’s stock gained 63.9% and skyrocketed 214.9% over five years. For the year to end-March 2024, Richemont reported a 3% increase in sales to €20.6bn (+8% at constant exchange rates), with its jewellery division contributing more than €14bn and a 33.1% operating margin.
Despite its strong performance, Richemont faced challenges, particularly in China, where economic headwinds have dampened luxury demand.
The group terminated its SA depository receipt programme to improve share tradability, a move that should make its stock more accessible to international investors. Meanwhile, the group also called off the sale of Yoox Net-a-Porter to Farfetch, opting to explore new strategic alternatives for its troubled online retail business.
Richemont last year re-established the group CEO role, appointing long-time executive Nicolas Bos as its new boss.
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