Reuters: Hot Stocks: UPDATE 2-Richemont chairman to take year off

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UPDATE 2-Richemont chairman to take year off May 16th 2013, 09:41 Thu May 16, 2013 5:41am EDT * Rupert to take one year leave after September AGM * Richemont recently reorganised top management * April sales growth picks up to 12 pct * Views future "with a degree of optimism" * Shares rise over 5 pct, outperform sector (Adds chairman, analyst quotes, background, shares) By Silke Koltrowitz ZURICH, May 16 (Reuters) - Richemont's chairman and founder will take a year off from September, leaving the world's No. 2 luxury group in the hands of recently-named joint chief executives at a time of faltering growth in the industry's key market of China. The 62-year-old South African billionaire Johann Rupert, who transformed his father's sprawling business interests into a world force in watches and jewellery, said on Thursday he had about 50 books he wanted to read and might travel to Antarctica. "I just want to be the master of my time for some time," Rupert told reporters. "It is ironic someone in the watch business should not be in control of his time." The plain-speaking Afrikaner, who holds 50 percent of Richemont's voting rights, said he had prepared his absence well by naming veterans on its senior executive committee and placing younger managers at the helm of the group's biggest brands. The maker of Cartier watches also reported a pick up sales growth to 12 percent in April from 9 percent in the year ended March, helped by strong demand in Japan ahead of price hikes. But it added the good April should not necessarily be taken as an indication for the months ahead amid continued uncertainty in the world economy. Luxury goods companies are particularly worried about China, which has been the engine of growth in the industry but where customers have recently been buying fewer expensive timepieces as gifts for business partners since the government started a broad-based anti-corruption campaign. "Current trading in April is very encouraging," Exane BNP Paribas analyst Luca Solca said. The news on Rupert was less positive, "but the company is in good hands," he added. At 0855 GMT, Richemont shares were up 5.6 percent to 87.2 Swiss francs on the back of the stronger April figures, after hitting an all-time high of 88.8 francs earlier in the session. Rupert is the latest in a string of top company executives this month to announce plans to step down or take time out, including the chief executives of oil company Royal Dutch Shell , spirits group Diageo grocer Delhaize and industrial group ABB. "A DEGREE OF OPTIMISM" Born and raised in the heart of the South African wine-producing region where he still lives, Rupert dropped out of university and took apprenticeships at New York banks before returning home in 1979 and founding Rand Merchant Bank. Forbes lists Rupert and his family as having a net worth of $6.6 billion, making him South Africa's richest man. He joked he would not be playing more golf and would definitely return after a year, or possibly earlier: "Maybe I'll get bored very soon." Deputy Chairman Yves-Andre Istel will chair the board of directors in Rupert's absence while Bernard Fornas and Richard Lepeu, who took over as co-CEOs in April, and finance chief Gary Saage will manage the day-to-day business. Stanislas de Quercize succeeded Fornas as CEO of Richemont's flagship brand Cartier in January and Jerome Lambert, previously at Jaeger-LeCoultre, will take the reins of the second-biggest brand, Montblanc, which makes pens, watches and bags, in July. Richemont, which pre-released full-year results last month, said it viewed the future "with a degree of optimism" and almost doubled its dividend to one Swiss franc per share, up from 0.55 francs a year ago. Growth in the Asia-Pacific region, where Richemont generates 41 percent of group sales, slowed to 5 percent in the year ended March from 46 percent a year earlier. Group sales for the year rose 9 percent to 10.1 billion euros and net profit rose 30 percent to 2.0 billion euros. Richemont also said it proposed to transform its 522 million 'A' bearer shares into registered shares, reflecting a move away from bearer shares in Europe which do not keep track of transfers of ownership as do registered shares. and are more difficult to regulate. Its 522 million 'B' registered shares won't be affected by the change. Switzerland this year passed draft legislation to ensure authorities can identify the owners of bearer shares in Swiss companies as part of its effort to combat money laundering. Richemont shares trade at about 16.7 times forecast earnings for the next 12 months, in line with peer Swatch Group, but at a discount to its bigger rival LVMH. (Additional reporting by Martin de Sa'Pinto, editing by Emma Thomasson and Mark Potter) Link this Share this Digg this Email Reprints

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