Breaking News: Richemont Revamps Top Management as Profit Slumps

The luxury group abolishes the role of chief executive, promotes the next generation of leaders, while reporting grave half year results.

In the biggest change to its management in years, Richemont has announced the retirement of its chief executive and chief financial officer, as well as eight members of its board.

This represents a generational change for the Swiss luxury conglomerate, owner of brands like Cartier, IWC and Montblanc. The retirees who are in their 50s or 60s are being replaced by a executives a decade younger. Richard Lepeu, the chief executive who will retire at the end of March 2017, has been with Richemont and its predecessor companies for 30 years. For chief financial officer Gary Saage, it’s 28 years.

With Lepeu’s retirement, Richemont eliminates the post of chief executive, with brand heads reporting direct to the board and executive chairman Johann Rupert, also the group’s controlling shareholder.

Four Richemont executives, including the chief of Van Cleef & Arpels, will be elevated to the board to replace the departures during the annual general meeting in September 2017. Most notably, IWC chief executive Georges Kern will become Head of Watchmaking, Marketing and Digital, taking charge of the group’s watch division, while Jérôme Lambert, the boss of Montblanc, will be Head of Operations and all businesses other than jewellery and watchmaking. Both are significant moves for a pair long regarded as rivals by industry observers, and they give up their posts in their respective brands with the promotion.

This sets the stage for an interesting year ahead, adding to the speculation about management changes at Richemont’s brands. Several key managers, including the heads of Piaget, Panerai and Vacheron Constantin, are approaching the parent company’s retirement age of 65.

Georges Kern

The market reacted positively to the management shakeup, with Richemont shares up over 8% on the news, despite the poor financials announced at the same time.

After softening up the market with a gloomy forecast in September, Richemont released its half year results. For the six months to September 30, sales dipped 13% while profit fell 51%, and cash flow from operations fell 37%.

The worst performing division was watchmaking, with sales down 17% and profit sinking 53%.

This was driven by falling sales in most markets. European sales fell 17% while the decline was 8% in the Asia Pacific excluding Japan.

Wholesale was an especially poor performer, with sales to authorised retailers falling 20%. Several Richemont brands also bought back inventory from retailers, as well as closed boutiques and authorised retailers, leading to a write0down of €249m.

The full financials can be seen on Richemont’s investor portal.

Addition November 5, 2016: Date of management changes taking effect included.

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Hands-On with the Chopard L.U.C GMT One and Time Traveler One

Chopard introduces its new L.U.C. twin time zone wristwatches powered by quality, in-house movements.

The Chopard L.U.C line of high-end mechanical timepieces is well stocked with dress watches and complications, but skimpy on sporty, functional types. That gap is now filled by the new L.U.C GMT One and Time Traveler One, a pair of COSC chronometer-certified travel watches starting at just under US$10,000.

A watch showing two time zones simultaneously, the L.U.C GMT One is a straightforward travel watch and the more affordable of the pair. The crown at two o’clock sets the date and local time (shown on the main hour and minute hands), while the crown at four o’clock advances the arrow-tipped GMT hand and 24-hour outer scale on the dial.

Chopard L.U.C GMT One steel 1 Chopard L.U.C GMT One steel 2

The GMT One is equipped with the Chopard L.U.C 01.10-L, an in-house automatic movement with a 60-hour power reserve. Finished in a clean, appealing manner, the movement has admirable detailing and is amongst the best in its price range. That’s an accomplishment common to many L.U.C watches, all of which are powered by top class, in-house movements.

Chopard L.U.C GMT One steel 3 P7150082

While L.U.C movements are undeniably excellent, the watch designs err on the side of caution, tending to the conservative. The new travel watches are modern by L.U.C standards, with a vaguely sporty style, but still traditional in appearance.

Available in rose gold with a brown dial or steel with a black dial, the GMT One is 42mm in diameter and stands 11.71mm high. While modestly sized it is not a small watch, but the case looks and feels smaller than it is, likely due to the dial design.

Though difficult to discern at a distance the dial has several different surface finishes. While different in colour, both versions have metallic, sun ray brushed dials, with the brushed finish centred on the Chopard logo at 12 o’clock for a novel but subtle effect. The hour track has a concentric stamping while the outermost 24-hour scale is circular grained.

Chopard L.U.C GMT One rose gold 2 Chopard L.U.C GMT One rose gold 3

Equipped with a more elaborate version of the same movement, the L.U.C Time Traveler One goes a step further. In addition to twin time zones, the Time Traveler One also offers a world time function, simultaneously showing the time in all 24 of the world’s time zones.

Like on the GMT One, the local time is set via the crown at two, while the world time function is controlled by the crown at four o’clock.

The multiple time zones are read from the 24-hour scale and adjacent cities disc, with each city representing one time zone. This extra function is accompanied by a significantly more complex dial, though it swiftly becomes easily legible once the basic mechanics are grasped.

A arrow-shaped skeleton hand in the centre points to the date, which is shown on the innermost scale of the dial.

Chopard L.U.C Time Traveler One platinum 4

Chopard L.U.C Time Traveler One platinum 2

Chopard L.U.C Time Traveler One platinum 3

The L.U.C 01.05-L movement inside is similar to the calibre of GMT One, but slightly thicker to accommodate the world time mechanism. This means the Time Traveler One has the same 42mm diameter, but is imperceptibly thicker at 12.09mm high. And like the GMT One, the Time Traveler One feels smaller than it actually is.

Chopard L.U.C Time Traveler One platinum 5

Three versions of the Time Traveler One are available, starting with the top of the line in platinum. A surprisingly hefty (and very expensive) wristwatch, the platinum model is fitted with a metallic grey-blue dial.

Chopard L.U.C Time Traveler One platinum 1

The rose gold version is fitted with a conventional looking silver dial with red and blue accents, while the steel model is in black and orange.

Chopard L.U.C Time Traveler One rose gold

Chopard L.U.C Time Traveler One stainless steel 1

Chopard L.U.C Time Traveler One stainless steel 2

Price and availability 

The L.U.C travel watches are available from Chopard retailers and boutiques, with prices as follows, in US dollars and Singapore dollars:

L.U.C GMT One in stainless steel (ref. 168579-3001) – US$9500 or S$13,630

L.U.C GMT One in rose gold (ref. 161943-5001) – US$19,200 or S$27,540

L.U.C Time Traveler One in stainless steel (ref. 168574-3001) – US$12,800 or S$18,360

L.U.C Time Traveler One in rose gold (ref. 161942-5001) – US$22,500 or S$32,270

L.U.C Time Traveler One in platinum (ref. 161942-9001) – US$35,200 or S$50,480

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TAG Heuer Opens Silicon Valley Office in Pursuit of Smartwatch Success

The watchmaker's smartwatch push is now led by an ex-Intel exec from a new Silicon Valley outpost.

After selling all 60,000 TAG Heuer Connected smartwatches it produced this year, TAG Heuer is continuing its push into wearables with a new office in Silicon Valley, reports Bloomberg.

Led by the irrepressible Jean-Claude Biver, TAG Heuer has been the most enthusiastic amongst its Swiss peers in embracing the smartwatch.

Introduced in November last year, the TAG Heuer Connected is a smartwatch running Google’s Android operating system and powered by an Intel chip, allying TAG Heuer with two of technology’s biggest names.

TAG Heuer chief executive Jean-Claude Biver

The watchmaker’s office opened November 1 inside Intel’s campus located in Santa Clara, California. Home to a dozen employees, the office will focus on research and development.

TAG Heuer also hired Tom Foldesi, a former Intel executive involved in the chipmaker’s wearables division, to lead its smartwatch efforts.

Having just announced an 18k red gold smartwatch, TAG Heuer plans to introduce a second generation smartwatch in April 2016, with plans to sell 150,000 of them by year end.

Source: Bloomberg

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