Richemont Chairman Rupert to Take Sabbatical After 25 Years; “I just want to be the master of my own time for a while,” he said, adding he will return. “It’s ironic that someone in the watch business isn’t in control of his time.”

Richemont Chairman Rupert to Take Sabbatical After 25 Years

Cie. Financiere Richemont SA (CFR) Chairman and controlling shareholder Johann Rupert will take a year off, leaving management of the world’s second-biggest luxury-goods company to a team of executives including Cartier’s former CEO. The stock rose as much as 7.6 percent to a record after the Geneva-based maker of Montblanc pens and Chloe fashion said it’s increasing its dividend 82 percent to 1 Swiss franc a share to mark its 25th anniversary. Rupert’s leave will put the company in the hands of Co-Chief Executive Officers Richard Lepeu and Bernard Fornas, who previously ran Cartier. The 62-year-old South African billionaire ended his third stint as CEO in March after having taken on the job in 2010 to replace his predecessor who resigned for health reasons. His sabbatical will start after the annual shareholders meeting in September.

“There are things I want to see and want to do,” Rupert said in a call with reporters, adding he may go to Antarctica and has 50 books he’d like to read. “I have the right to take a break after 25 years.”While he is “perfectly healthy” and has stopped smoking, losing several friends to heart attacks was one factor that influenced his decision, he said. Rupert said he had to turn down an offer to attend the Rugby World Cup in New Zealand in 2011 and has declined offers to go fly-fishing as he didn’t have four days to spare to learn the sport.

Time Master

“I just want to be the master of my own time for a while,” he said, adding he will return. “It’s ironic that someone in the watch business isn’t in control of his time.”

Rupert, whose hobbies include wine-making, golf and vintage cars, said he’ll stop taking phone calls and leave management to Fornas, Lepeu and Chief Financial Officer Gary Saage. He gave up his CEO role to Lepeu and Fornas last month.

The stock traded 6.7 percent higher at 88.05 francs at 1:08 p.m. in Zurich after the company said sales in April rose 13 percent following a 30 percent gain in profit in the 12 months through March to 2.01 billion euros ($2.6 billion). The shares have gained 53 percent in the past year, giving the company a market value of 50.6 billion francs ($52 billion).

“The April number bodes well,” said Rey Wium, an analyst at Renaissance Capital in Johannesburg. His forecast was for growth in the “mid-single” digits.

New Management

The luxury-goods maker last week named Jerome Lambert to become CEO of Montblanc, while Daniel Riedo, the industrial director of the Jaeger-LeCoultre brand, will take Lambert’s position as head of the watchmaker.

The company owns 19 brands, more than half of which are at least a century old.

“I would not have taken a year off if I weren’t happy with my colleagues and what is in the pipeline,” Rupert said.

Richemont is returning cash to shareholders amid a lack of big takeover targets and as it has more than it needs to invest in its own businesses, executives said. Net cash totaled 3.18 billion euros at the end of March, compared with 2.59 billion the same date last year.

Any acquisitions Richemont makes aren’t going to “move the needle,” Rupert said. The company prefers to invest in its own brands, for example expanding Piaget in jewelry, rather than make acquisitions.

The company aims to increase its dividend “steadily over the long term,” and this year’s increase isn’t a guide for future ones, CFO Saage said.

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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