Richemont, the luxury goods group known for its brands like Cartier, saw a surge in its stock price on the Swiss stock exchange after reports emerged that the US activist hedge fund Third Point had invested in the company. The Financial Times and the Miss Tweed online news portal reported that Third Point, led by US activist investor Daniel Loeb, had purchased a stake in Richemont. In addition to this, Artisan Partners, a US fund that has held a stake in the company for several years, is also pushing for Richemont to improve its performance.
Following these reports, the stock of Richemont rose by 3.57 percent at 1323 GMT, reaching 124.60 Swiss francs. This notable increase outperformed the SMI, the benchmark index of the Swiss stock exchange, which only witnessed a 0.36 percent uptick. Despite the speculations, both Richemont and Third Point declined to comment when approached by AFP.
Third Point is well-known for exerting pressure on large companies to expedite their transformation. In October, the hedge fund invested hundreds of millions of dollars in the oil giant Royal Dutch Shell, advocating for the company to split into multiple entities due to what Loeb believes is an inconsistent strategy. Similarly, in 2017, Third Point targeted Nestle in Switzerland, criticizing the food giant for lagging behind smaller competitors who were more in line with new consumer trends.
Richemont has faced criticism for failing to keep up with its competitors in the luxury sector, especially during a decade of substantial growth driven by Chinese consumer demand. Despite the fact that Richemont Chairman Johann Rupert only holds 9.1 percent of the company’s capital, he still controls 50 percent of the voting rights.
Richemont, which generates more than half of its revenue from jewelry sales, is scheduled to release its half-year results on Friday. This report is expected to provide further insights into the company’s financial performance and any potential future initiatives aimed at addressing the concerns raised by investors.
Useful links:
– Financial Times article on Third Point’s investment in Richemont
– Miss Tweed article on Third Point’s investment in Richemont
