Richemont, On the Rise, Entrusts its Buyback Program to Morgan Stanley

Swiss luxury group Richemont, whose majority shareholder is South African billionaire Johann Rupert, announced on Monday 19 May that it had changed its share buyback plans. A large-scale buyback program had been established in 2023 and could have involved up to 10 million shares (class A).

Following the signing of a delegation agreement with Morgan Stanley, the London-based investment bank will now be responsible for implementing the program. Since the beginning of the year, the Swiss giant's share price has risen by 20%.

The financial results for the year ended March 31, published last Friday, reveal a unique situation. Despite the surge in gold prices, jewelry offset the decline in the watch division. Overall sales for the group rose 4% to €21.4 billion. Richemont's jewelry division had already posted remarkable results last year, with an 8% increase to €15.3 billion, representing 54% of the group's global sales.

While all is well for the jewelry houses in the Richemont portfolio, such as Cartier and Van Cleef and Arpels, the same cannot be said for watches. Sales in this division stabilized at €3.3 billion, representing a decline of 13%.

The success of the jewelry division is partly driven by the trend among the wealthiest consumers to turn to gold as a “safe haven” since its price rose by 30% in the post-pandemic period. On the other hand, one of the main causes of stagnation in the watch market is undoubtedly the crisis in the Chinese market, which is less keen on Western luxury goods than in the past. In China, which remains the most important market for watch exports after the United States, sales of Richemont watches fell by 27%.

However, the success of the jewelry division and its bright future prospects have enabled the group to remain one of the most resilient in the luxury sector and to make significant investments.

During the 2024-2025 financial year, the company spent around €400 million to boost its production capacity. In what has been another difficult start to the year for the luxury sector, the resilience of the jewelry business enabled the group to achieve 7% growth in the first quarter: financial results that confirm Richemont as one of the strongest companies in the sector.