Richemont Strengthens Its Jewellery Empire Amid Global Luxury Headwinds

Administrateur
Jun 12
4 min read

Since its creation in 1988, Compagnie Financière Richemont has stood as the guardian of Swiss jewellery and watchmaking savoir-faire. With iconic Maisons such as Cartier, Van Cleef & Arpels and Jaeger-LeCoultre, the group is posting roughly €21 billion in revenue for 2025 and employing 40 000 people. Its strategy rests on three pillars: concentration on tangible products with intrinsic value, direct control of distribution and sustained investment in digital innovation.

Portfolio Structure and Financial Weight of the Segments

Richemont’s portfolio is organised around four poles, each following a distinct economic logic.

Jewellery – the crown jewel of the group: Cartier, Van Cleef & Arpels, Buccellati and, more recently, Vhernier account for nearly 70 % of consolidated revenue and more than four-fifths of operating profit. The blend of formidable brand power, strong pricing leverage and a high-margin, directly operated retail network makes this pole the financial locomotive, with EBIT margins consistently above 30 %, fuelling generous self-financing capacity.
Specialist Watchmakers – an under-exploited gem: IWC, Jaeger-LeCoultre, Vacheron Constantin, Panerai, A. Lange & Söhne, Piaget and Baume & Mercier generate about 18 % of sales but struggle to turn volume into profits. After a post-pandemic rebound, the margin slipped back below 6 % in 2025, weighed down by Swiss industrial costs, competition from independent brands and heavier exposure to tourism. Priorities include streamlining collections, intensifying direct-to-consumer sales and pooling R&D to lift profitability above 10 %.
Online distribution and pre-owned – the omnichannel laboratory: Watchfinder&Co., Montblanc.com and the former stake in YNAP contribute 8–10 % of revenue, with only modest earnings so far. Strategically, however, this pole provides control of customer data, visibility on the growing pre-owned market and a testing ground for digital services (payments, personalisation).
Fashion & accessories – creative showcase and selective diversification: Montblanc, Chloé, Alaïa and, since 2024, Gianvito Rossi together represent about 5 % of sales. Their main role is to broaden the group’s lifestyle offering and maintain brand desirability among a wider audience. Margins here are more modest, but the halo effect lifts the core segments.

This architecture sharpens Richemont’s positioning: jewellery as the profit engine, watchmaking as potential to revive, digital as the customer-relation catalyst and fashion as a storytelling ramp.

Governance and Capital Structure

The Rupert family, via Compagnie Financière Rupert, owns 100 % of the non-listed B-shares and controls 51 % of voting rights with only 10 % of the capital. This dual-class structure protects long-term vision: Johann Rupert remains chairman, while Nicolas Bos, former CEO of Van Cleef & Arpels, has led the group since 2024 with a clear mandate to accelerate digitalisation, reinforce jewellery and restore watchmaking profitability.

Strategic Positioning versus LVMH and Kering

LVMH dominates fashion and leather goods, Kering the creative labels; Richemont concentrates on enduring products made of precious metals and stones. In an uncertain macro-economic climate, this “hard luxury” proves more resilient: fine jewellery retains a refuge-value, while demand for cyclical fashion normalises. A high-margin mono-brand retail model and Cartier’s ability to release iconic collections position Richemont as the world reference in high jewellery.

Operational Modernisation

To sustain growth, Richemont has:

Forged an alliance with Farfetch, transferring 47.5 % of YNAP to access the platform’s omnichannel technologies.
Accelerated direct sales: 76 % of revenue now flows through owned channels, reducing dependency on multi-brand distributors.
Rationalised the portfolio: divestment of low-margin e-commerce platforms and targeted acquisitions (Gianvito Rossi, Vhernier).
Restructured watchmaking: more autonomy for Maison CEOs and a renewed focus on high-end complications.

Major Challenge: Low Profitability in Watchmaking

Despite a partial rebound in 2023, the watch division remains fragile. High Swiss industrial costs, reliance on wholesale partners hungry for discounts and the sector’s greater cyclicality leave the margin below 6 %. Richemont plans to reduce SKUs, push direct-to-consumer, enrich after-sales services (certification, restoration) and pool calibre R&D to lift margins.

Chinese Slowdown: Risk and Opportunity

China once accounted for nearly a third of Asia-Pacific sales; a 19 % regional revenue contraction in 2024/25 exposed the group’s vulnerability. Two buffers, however, are at play: geographic diversification (Americas +10 %, Japan +32 %, Middle East +15 %) and a more resilient premium product mix. In the near term, Richemont is broadening its domestic Chinese clientele via exclusive services. Over the medium term, growth is expected from India, ASEAN and the Gulf, where wealth per capita is rising swiftly.

Financial Outlook

Revenue: average annual growth of 6–7 % expected for 2025-2027, driven by jewellery (+8 %), e-commerce (+15 %) and the gradual watch rebound (+4 %).
EBIT margin: sustained above 25 % thanks to mix and productivity gains, despite rising skilled-labour costs in Switzerland.
Free cash flow: more than €4 billion a year, funding modernisation capex (≈ €700 million) and a dividend of about 40 % of net profit, without material leverage (net debt/EBITDA < 1×).

Conclusion

With a portfolio dominated by jewellery, tight distribution control and an ambitious yet disciplined investment policy, Richemont seems well positioned to weather luxury-sector cycles. The group’s ability to revitalise watchmaking, harness omnichannel capabilities and diversify beyond China will prove decisive through 2025-2027. Should these initiatives succeed, Richemont will reinforce its status as the definitive “hard luxury” reference and continue creating long-term value for shareholders.