Richemont lifts its game plan with Watchfinder deal
Richemont, the Swiss luxury brands group run by the Rupert family, has taken another step in its aggressive plan to build a formidable retail network.
The group has bought UK-based Watchfinder, a pre-owned premium watch specialist that sells online and through boutiques. This follows speculation that Richemont’s decision to restrain its dividend payments and a recent bond issue signalled acquisition plans.
At the same time, Richemont — which owns brands like Cartier, Officine Panerai, Piaget Montblanc and Van Cleef and Arpels — has sold its leather goods subsidiary Lancel.
Richemont chairman Johann Rupert believed there were substantial opportunities to grow Watchfinder further. “Today, Watchfinder operates both as an online and offline business in a complementary, growing and still relatively unstructured segment of the industry.”
Rupert said together with Yoox Net-a-Porter (YNAP) and Richemont’s stake in Dufry, buying Watchfinder was another step in Richemont’s strategy. “It will enable us to better serve the sophisticated needs of a discerning clientele.”
Richemont is close to completing its takeover of YNAP, already holding more than a 95% stake in the online retailer of high end fashion brands.
Richemont’s sale of French luxury purse maker Lancel was signalled earlier in 2018 as the group looks to shake up its less profitable fashion segment.
Richemont acquired Lancel more than 20 years ago, but this never was a meaningful contributor to the bottom line.
The business was been sold to Piquadro, an Italian leather goods group listed on the Milan Stock Exchange, in exchange for a profit-share arrangement.
Richemont said the transaction would have no material effect on the balance sheet, cash flow or results for the year ending March 2019.
The sale of Lancel follows the recent disposal by Richemont of Hong Kong-based dressmaker Shanghai Tang.
There has been speculation that Richemont — which is largely anchored on its watchmaking and jewellery brands — could dispose of more “soft luxury” businesses.
According to the Piquadro website, Lancel generated sales of €53m and had a loss of €23m in the year to end of March.
Piquadaro said Lancel had net cash of €41m, which was deemed sufficient financial resources to fund foreseeable trading and a significantly reduced annual operating cost structure already implemented by Richemont.
Piquadro said as settlement Richemont would receive a share of the profits earned by Lancel in the next 10 years. This, however, would not be more than €35m.