A shrinking share price, fear of stagflation and uncertainty about China’s medium-term future haven’t undermined Johann Rupert’s underlying optimism about Compagnie Financière Richemont, or the future of hard luxury.
, said the brand has been performing strongly in the U.S. across jewelry, watches — and every other category. Demand, he said, “has been very solid for the past year.”
Currently about 40 percent of Richemont’s retail network in the country is shut, while clients and staff alike are stuck at home. Rupert said there is no excess stock in China and, of late, Richemont has been diverting inventory shipments to Japan. Analysts, and the markets, were concerned about the lack of an update on the Farfetch deal, and Richemont’s earnings before interest and tax margin for the year, which was 11 percent below consensus expectations.
The deal, Richemont added, involves “considerable complexity, which means the process is inevitably protracted.” The company said it is looking forward to concluding matters in the “near future.”about creating an open and shared platform with YNAP to sell fashion, luxury and high-end jewelry. “We’re pretty close to where we want to be. We all agree that we’ve got to do it, so let’s do it. We are not in a position where there is a disagreement between principals. There is a buy-in from all of our maisons. There’s been tremendous progress,” he said.
“We are building another route to market, an infrastructure, a pipeline, a fiber optic network. We are doing the spadework for online as a route to market, so I don’t look at [the JV] as an operating loss. I look at it as an investment,” Rupert said. While Rupert may feel secure about his own company’s prospects going forward, he’s concerned about macro challenges, including stagflation, which he said he remembers well from living in New York in the ’70s.
He said contrary to what some people may think, he eyeballs every single design that Richemont markets and sells. He said the company’s great challenge continues to be “making products for three to four years in the future, looking at the pipeline and betting that our taste will be in demand.”
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