Richemont – Swiss Based Luxury Goods Company
Richemont, a family-spirited group in South Africa, is the owner of prestigious Maisons, which engages in the designing, manufacturing, and distributing luxury goods.
Richemont manufactures and sells jewellery, watches, clothing, leather goods, pens, and accessories. Richemont is known for its excellence and is distinguished by craftsmanship and creativity. Each of the Maisons and businesses have their managing team for generating designs, developing products, manufacturing, and selling the products.
Richemont was founded by a South African businessman, Johann Rupert, in 1988. Richemont is a Switzerland-based luxury goods company. The company encompasses some of the well-known names in the luxury industry, including A. Lange & Söhne, Cartier, Chloé, Van Arpels & Cleef, Panerai, Dunhill, and Montblanc.
In 2000, the three most reputed Swiss watchmakers, Jaeger-LeCoultre, IWC Schaffhausen and A. Lange & Söhne, became part of Richemont.
In 2010, Richemont stepped into an online luxury retail and increased its ownership to more than 90% of the shares of NET-A-PORTER.COM, by now the premier online luxury fashion retailer. To date, the commitment was made that manufacturing would be done keeping the extra care for the environment.
In 2013, a major event occurred, as Richemont became a participant in the United Nations Global Compact. The year 2013 was also the start of Cartier Charitable Foundations operations.
In 2020, when the disruption of Covid occurred, Richemont’ Maisons, businesses and people, facilitated and participated in the first Digital Watches and Wonders, which was an exclusive version in China: Watch Show on the Cloud. Meanwhile, the other businesses of Richemont continued to develop their digital offers, launching online flagship stores on Tmall Luxury Pavilion in China.
In 2021, Richemont and Albar Elbaz launched an AZ Factory, which focused on the smart fashion that cares. The venture focused on a solutions-driven fashion that serves everyone. The main idea of this venture was based on love, care, and trust, with sustainability at its core.
Image source – pvl stock.adobe.com
Richemont operates on the objective of increasing the value of shareholders in the long term.
The list of major shareholders in Richemont are:
- The Vanguard Group, Inc. has a share of 2.44% in Richemont.
- Artisans Partner LP has a share of 2.02% in Richemont.
- Gardener Russo & Quinn LLC has a share of 1.37% in Richemont.
- Norges Bank Investment Manager has a share of 2.36% in Richemont.
- Invesco Advisor. Inc. has a share of 2.51% in Richemont.
There are many other companies and people who are shareholders in Richemont.
Richemont IPOs are listed on the SIX Swiss Exchange and are included in the Swiss Market Index (SMI) of major stocks.
Richemont South African Depository Receipts are traded on the Johannesburg Stock Exchange as Richemont’s secondary market.
Richemont’s investment areas are jewellery makers, specialist watchmakers, online distributors, and fashion/other accessories. Richemont has invested in a huge number of companies.
Some of the wholly owned companies/brands by Richemont are:
NET-A-PORTER, the world’s leading retailer, delivers amazing fashion for women. It includes more than 800 of the world’s most reputed designer brands and over 200 specialist beauty brands. In May 2018, Richemont acquired NET-A-PORTER by purchasing 95% of the company’s available shares. The combined company has become a global e-commerce brand that serves nearly 200 countries.
Chloe was founded in 1952 in Paris, France, by Gaby Aghion. Chloé designs beautiful products with meaningful impact, enhancing stories and sharing experiences. Chloé deals in ready-to-wear bags, jewellery, fragrances, eye-wear, and makeup, etc. Chloé is officially owned by the Richemont group.
Cartier was founded in 1847 by Louis Frances Cartier. Cartier deals in the manufacturing, distribution, and selling of jewellery and watches. Cartier has made an incredible mark on the world of jewellery and luxurious watches.
The company has headquarters in Paris, though Cartier is a wholly-owned subsidiary of the Swiss Richemont Group. Cartier has around 200 stores in 125 countries, with three Temples usually known as historic Maisons, and they are in London, New York, and Paris.
4. Lange & Söhne
A.Lange & Söhne is a German manufacturer of prestigious and luxurious watches. A. Lange &Söhne creates exclusive watches with proprietary movements that are beautifully decorated and assembled twice by hand. Richemont owns A. Lange& Söhne.
Richemont business strategy
The main business strategy of Richemont is to provide guidelines, set standards and policies, and provide the right business environment for Maisons and businesses to develop their brand’s sustainability and equity.
Richemont believes in running effective local operations and attracting local talents.
Richemont also believes in pursuing sustainable performance through its firm principles and financial discipline. Therefore, the main aim of Richemont is now to minimise the environmental impacts of its business activities.
Richemont Stock Analysis
Richemont is considered the second-largest luxury goods company in the world It has a secondary listing on the JSE. Richemont is considered one of the JSE’s largest companies according to the market capitalisation, at R479 billion. The share price of Richemont has been very high historically.
The return on equity for the company is near 7% while return on assets lies just above 5%. The P/E ratio is near 40 while the dividend yield is under 2%. It indicates that the stock is the right choice for conservative long-term traders. Technically, the stock price holds a steady trend with little jerks of retracement. Momentum and trend indicators point at further gains. However, day traders should observe lower timeframe charts to learn about short-term directional bias.
Now we know that the main purpose of Richemont is to encourage their Maisons and businesses to enable their growth while staying true to their culture and heritage.
The latest moves by Richemont promises to strengthen its e-commerce and fashion offerings in South Africa. Richemont announced quite a few things in the past year, such as the joint-venture with Alibaba to invest in Farfetch.
In its recent results, Richemont reported that it had seen a strong growth in its jewellery brands in Asia and the Middle East, which is helping to subside the weakness in its European markets.
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