Faced with the growing risk of inflation threatening luxury values, Richemont has announced the creation of an entity dedicated to perfumes and beauty. To accompany this strategic shift, the Swiss luxury giant has also announced three key appointments to its leadership team.
European stock markets closed lower on Wednesday, influenced by several recent indicators and the announcement of the extension of oil production cuts by Saudi Arabia and Russia, raising concerns about more sustained inflation than expected. In addition to this, there are new signs of weakness in the Chinese and European economies, which are putting pressure on investor sentiment.
In this context, Johann Rupert, the chairman of Richemont, the Swiss group that owns brands such as Cartier, Piaget, and Chloé, stated that the demand for luxury products in Europe is beginning to be affected by inflation. According to him, high prices are even causing affluent European consumers to reduce their purchases.
This is illustrated by the decline in LVMH shares, which fell by 3.6% in Paris yesterday, while Richemont’s share price dropped by over 5% in Switzerland.
To better address this threat, Richemont has made two significant announcements, including the creation of a new entity focused on perfumes and beauty, as well as important appointments within its executive committee.
Dedicated Perfumes and Beauty Division
Richemont has unveiled the creation of a new entity focused on perfumes and beauty, following in the footsteps of its competitors such as the French group Kering, which launched its Beauty division last February, and the Italian house Dolce & Gabbana, which internalized its beauty activities in 2022 under the banner of Dolce & Gabbana Beauty.
The Swiss group, which acquired the leather goods manufacturer Delvaux in 2021 and the Italian shoemaker Gianvito Rossi last July, has created this new entity, named the “Laboratory of Haute Parfumerie and Beauty,” with the aim of allowing its six houses already active in the perfumery sector to strengthen their presence in this highly competitive industry.
Appointments
Richemont has appointed Boet Brinkgreve, an expert in the chemical, perfume, and flavor industries, with three decades of experience in the United States, China, and Europe, to become the CEO of the “Laboratory of Haute Parfumerie and Beauty.
Mr. Brinkgreve holds a degree in mechanical engineering from Eindhoven University/HTS Den Bosch in the Netherlands and has a Master of Business Administration from Insead in France. This Swiss expert of Dutch origin held several senior management positions at DSM – Firmenich between 2007 and 2023, with his most recent role being the presidency of the Ingredients and Procurement division of the group. Prior to that, he worked at DuPont in business development roles from 2003 to 2007 and founded several companies.
Swen Grundmann has been promoted to the position of Director of Corporate Affairs. This Dutch expert in law and corporate governance joined Richemont in 1996 as a legal counsel and climbed the ranks to become the group’s secretary-general in 2017. He will assume his new role while retaining his position as company secretary. He also becomes a member of the executive committee.
Finally, Gary Saage has joined the board of directors. Having joined Richemont in 1988, he served as the group’s Chief Financial Officer from 2010 to 2016. It is anticipated that he will assume the chairmanship of the audit committee.
Expanding Creations and Licenses
[arm_restrict_content plan=”1,” type=”show”]
According to Richemont, the “Laboratory of Haute Parfumerie and Beauty” will work “in collaboration with the brands, preserving their distinctive high-end positioning, to support them in the development of refined creations and promising licenses.”
“Boet’s role will be essential in enabling our houses to fully leverage their potential in this dynamic market, expanding their customer base while strengthening their ability to meet the demands of their very discerning clients,” commented Johann Rupert.
Concerns at Interparfums
The arrival of this prominent figure within the Swiss company has raised concerns in the Perfume industry, particularly among players like Interparfums. Indeed, the French group holds perfume licenses for two of Richemont’s flagship brands, Montblanc and Van Cleef & Arpels, and saw the value of its shares drop on the Paris Stock Exchange during the session on September 6th following this announcement.
Industry players are concerned that the appointee might make decisions regarding the granting of licenses to third parties or revoke licenses already granted, particularly the one for Montblanc. Montblanc has become the flagship brand in Interparfums’ portfolio, accounting for 27% of a revenue close to 400 million in the first half of the year. The contract with Richemont for Van Cleef & Arpels fragrances contributes 3% to the French group’s revenues.
[/arm_restrict_content] [arm_restrict_content plan=”1,” type=”hide”] [elementor-template id=”101048″] [/arm_restrict_content]
Read also>RICHEMONT FALLS ON THE STOCK MARKET AFTER DISAPPOINTING QUARTERLY RESULTS
Featured photo : ©Richemont
