Business

Johann Rupert, the luxury boss who left a hedge fund in a battle-ready mood


The atmosphere at Richemont’s annual meeting in Geneva on Wednesday was tense as billionaire Johann Rupert presided over a key shareholder vote. Hedge fund activist Bluebell accused him of acting like a “scam,” a godfather-like figure, and filed resolutions aimed at changing governance at the Swiss luxury group. .

“I hope this meeting doesn’t turn into a football match,” said the 72-year-old Richemont chair after a lively exchange with a representative of Bluebell.

It’s a deft observation that lightens the mood and gives a glimpse into the personality of the South African tycoon, described by a friend as “resourceful and thick-skinned. . . street fighter”. Those who know him well say that, although he may appear heavy-handed, he values ​​decency.

“Johann is very outspoken and very loyal,” said Patrick Thomas, former chief executive of luxury group Hermès, who joined Richemont’s board last year. “He won’t deal with people he doesn’t trust.”

Thomas added: “He may look a little rough but he’s actually very delicate and has strong human convictions.”

One investor said: “You see this flamboyant, bullish old-fashioned chair, but there is another side to him. . . frank and honorable. ”

Bluebell episode is out Rupert and his family company come into the spotlight at a time when they too are grappling with the question of succession and the looming slowdown in the global economy that could dampen demand for Richemont brands such as Cartier and Van Cleef & Arpels. Shares of Richemont have lagged behind rivals Hermès, LVMH and Kering over the past five years.

Finally, easy Rupert bid farewell to the challenge from Bluebell.

Shareholders have completely rejected his three resolutions to restructure the board, a sign they still trust Rupert to lead despite hedge fund criticism that he uses a stage structure. dual level to ignore minority shareholders. His family’s parent company owns only 9.1% of the shares, but its B shares hold 50% of the voting rights.

Notably, shareholders rejected Bluebell’s nomination of former Bulgarian executive Francesco Trapani as director. Richemont thinks he is too closely linked to LVMH.

Richemont’s governance structure is the legacy of the decisions Rupert, a college dropout and sports fanatic starting out in finance, made in the 1980s when he established his headquarters in Switzerland and went public. of the company.

The move allowed the Rupert family to diversify outside of apartheid South Africa, where Anton RupertJohann’s father, founded his business empire from a £10 investment in tobacco production in the 1940s. As a child suffering from depression, eldest brother Rupert realized that people would continue to buy tobacco and alcohol during any downturn, and eventually accumulating investments in industry, banking and luxury that would later be part of the Rembrandt Group.

Richemont was formed when the younger Rupert split from Rembrandt’s international assets in 1988.

Rupert’s family history and upbringing instilled in him a caution reflected in Richemont’s fortress-like balance sheet. Dubbed “Rupert the Bear” in 2006 for predicting a world economic crisis, the South African is seen as more risk-averse than rival patriarch Bernard Arnault. The French billionaire used shrewd acquisitions to build LVMH into the world’s largest luxury conglomerate, with a market capitalization five times that of Richemont.

In contrast, Rupert has made fewer big deals, preferring instead to invest in expanding the brands Richemont already has. One of his biggest bets has proven worth ruined – the group made a cashless €2.7 billion bet last month after selling a majority stake in the e-commerce operation unprofitable Yoox Net-a-Porter.

Rupert has built a global network of billionaires, financiers and sports stars from whom he seeks insight and advice. “He’s the only person I’ve ever met who listens by talking all this time,” the investor said. “He talks, dominates and takes it all.”

He has three children with his wife Gaynor, one of whom is a board member of Richemont, and divides his time between London, Geneva and the family farm in the Stellenbosch wine region.

He has never lost touch with his roots in South Africa. Lord Robin Renwick, a former Richemont board member, recalls: “The family was a big critic of racism, especially Johann. “Not many other high-profile entrepreneurs were ready to stand up and criticize racism at the time.”

Renwick, then a British diplomat, said Rupert helped in the campaign to get Nelson Mandela out of prison. After their release, the pair became friends, Renwick added.

“In South Africa, Johann is like a Warren Buffett character,” says Renwick. He is also a favorite henchman of South Africa’s populist Anti-Economic Freedom party.

A feat with a small operating fund is no small feat for a man who has been at odds with former South African president Jacob Zuma. “I hate what he’s allowed to happen to the country, but I don’t hate him,” Rupert said in 2018.

Going forward, he faces much bigger challenges than Bluebell. The economic downturn threatens to hurt demand for luxury. LVMH’s Arnault has long coveted Cartier, and Richemont turned down an unspecified approach from Kering a few years ago because Rupert insisted he had no intention of selling.

Ultimately, he will have to hand power over to a new leader, while finding a way to preserve Richemont’s independence. The company said it has a succession plan but has not shared it. The investor bluntly said: “He has a succession problem.”



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