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Johann Rupert, the luxurious boss who noticed off a hedge fund within the temper for a battle

Johann Rupert, the luxury boss who saw off a hedge fund in the mood for a fight

The ambiance at Richemont’s annual assembly in Geneva on Wednesday was tense as billionaire Johann Rupert presided over an important shareholder vote. Activist hedge fund Bluebell had accused him of appearing as a “padre-padrone”, a godfather-like determine, and submitted resolutions to shake up governance on the Swiss luxurious group.

“I hope this assembly won’t flip right into a soccer match,” stated the 72-year previous Richemont chair after a heated trade with Bluebell’s consultant.

It was a deft statement that lightened the temper and supplied a glimpse of the character of the South African tycoon, described by one buddy as a “resourceful and thick-skinned . . . avenue fighter”. Individuals who know him nicely say that, whereas he can seem heavy-handed, he values propriety.

“Johann could be very straight and really loyal,” stated Patrick Thomas, the previous chief govt of luxurious group Hermès who joined the board of Richemont final yr. “He received’t cope with individuals he doesn’t belief.”

Thomas added: “He can come throughout as somewhat bit tough however he’s truly very refined and has robust human convictions.”

An investor stated: “You see this bullish, bombastic old-style chair, however there’s one other facet to him . . . easy and honourable.” 

The Bluebell episode propelled Rupert and his household firm into the highlight at a time when they’re additionally grappling with the query of succession and a looming downturn within the international economic system which will damp demand for Richemont manufacturers similar to Cartier and Van Cleef & Arpels. Richemont’s shares have lagged these of rivals Hermès, LVMH and Kering over the previous 5 years.

Ultimately, Rupert simply noticed off the problem from Bluebell.

Shareholders overwhelmingly rejected its three resolutions to reconfigure the board, an indication they nonetheless trusted Rupert to steer regardless of the hedge fund’s critique that he makes use of the dual-class construction to disregard minority shareholders. His household holding firm solely owns a 9.1 per cent stake, however its B shares maintain 50 per cent of the voting rights.

Notably, shareholders rejected Bluebell’s nomination of former Bulgari govt Francesco Trapani as a director. Richemont argued he was too carefully related to LVMH.

Richemont’s governance construction is a legacy of selections Rupert, a school dropout and sports activities fanatic who began out in finance, made within the Nineteen Eighties when he established its headquarters in Switzerland and listed its shares.

The transfer allowed the Rupert household to diversify exterior apartheid South Africa the place Anton Rupert, Johann’s father, had based a enterprise empire from a £10 funding in cigarette manufacturing within the Forties. A toddler of the despair, the elder Rupert realised that individuals would hold shopping for tobacco and alcohol by means of any downturn, and finally amassed investments in trade, banking and luxurious that had been later housed within the Rembrandt Group.

Richemont was based when the youthful Rupert spun off Rembrandt’s worldwide belongings in 1988.

Rupert’s upbringing and household historical past have instilled in him a cautiousness that manifests itself in Richemont’s fortress-like steadiness sheet. Dubbed “Rupert the Bear” in 2006 for predicting a world financial disaster, the South African is seen as extra danger averse than rival controlling patriarch Bernard Arnault. The French billionaire used savvy acquisitions to construct LVMH into the world’s largest luxurious group, with a market capitalisation 5 instances that of Richemont.

In distinction, Rupert has executed fewer main offers, preferring as a substitute to speculate to broaden the manufacturers Richemont already has. One among his greatest bets proved worth damaging — the group booked a €2.7bn non-cash write down final month after promoting a majority stake in its unprofitable ecommerce operation Yoox Web-a-Porter.

Rupert has cultivated a worldwide community of billionaires, financiers and sports activities stars from whom he seeks perception and recommendation. “He’s the one individual I’ve met who listens by speaking the entire time,” stated the investor. “He talks, dominates and takes all of it in.”

He has three kids along with his spouse Gaynor, one in all whom is on Richemont’s board, and splits his time between London, Geneva and the household farm within the Stellenbosch wine area.

He has by no means misplaced contact along with his roots in South Africa. “The household was an enormous critic of apartheid, particularly Johann,” recalled Lord Robin Renwick, a former Richemont board member. “Not many different senior businessmen had been ready to face up and criticise apartheid at the moment.” 

Renwick, who was then a British diplomat, stated Rupert helped with the marketing campaign to get Nelson Mandela out of jail. After his launch the pair grew to become associates, Renwick added.

“In South Africa, Johann is sort of a Warren Buffett determine”, celebrated for his philanthropy, conservation and job creation, stated Renwick. He’s additionally a favorite bogeyman of South Africa’s populist Financial Freedom Fighters get together.

A fracas with a small activist fund is small fry for a person who clashed with former South African president Jacob Zuma. “I hate what he allowed to occur to the nation, however I don’t hate him,” Rupert stated in 2018.

Wanting forward, he faces far better challenges than Bluebell. An financial slowdown dangers hurting luxurious demand. LVMH’s Arnault has lengthy coveted Cartier, and Richemont rejected an unspecified tie-up method from Kering a number of years in the past as a result of Rupert insisted he had no intention of promoting.

Finally he should hand over the reins to a brand new chief, whereas additionally looking for to protect Richemont’s independence. The corporate stated it has a succession plan however has not shared it. The investor places it bluntly: “He’s acquired a succession situation.”

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