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Johann Rupert Slams Bluebell’s Proposals Ahead of Richemont AGM – WWD

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Richemont chairman Johann Rupert has urged Richemont’s shareholders to vote against the appointment of luxury veteran and activist Francesco Trapani to the board, citing his history with competitor LVMH Moët Hennessy Louis Vuitton, and describing him as an “inappropriate” candidate.

As reported, the activist investor Bluebell Capital Partners wants to install its cofounder Trapani, formerly chief of Bulgari and of the watch and jewelry division at LVMH, as the representative of the “A” shareholders on the board of Richemont with the aim of adding value to the Geneva-based luxury group.

Bluebell’s proposal will be put to a vote at Richemont’s AGM in Geneva on Sept. 7.

In the medium term, Bluebell would like to reshape Richemont and is lobbying for wider changes, including a strategic focus on hard luxury. The activist investor believes that, with certain changes, it could double its share price in the medium term.

Richemont shares were trading at 114.65 Swiss francs in mid-morning on Aug. 15. The company’s market capitalization is 59.85 billion Swiss francs.

Bluebell has described Trapani as “an undisputable leader in the jewelry and global and luxury goods industry with an exemplary track record.” It has said that having Trapani on the board would “significantly improve” Richemont’s governance, and contribute to the long-term success of the company.

In a detailed letter to shareholders, Rupert said that Bluebell has a relatively small stake in Richemont, parent of brands including Cartier, Van Cleef & Arpels, and Dunhill, and lacks the “legitimacy to represent all ‘A’ shareholders on the board.”

Rupert described Trapani as an “inappropriate candidate for election,” adding that he is “not independent, as he has a long history of close relationship with the LVMH group and its main shareholder.”

“LVMH is one of our company’s key competitors. The board may not responsibly recommend to shareholders to let a person who has a long history of association with that group – as well as a personal relationship with that group’s main shareholder – become a director of our company and intervene in our company’s decision-making process,” Rupert said.

Richemont’s chairman reminded shareholders that Trapani was CEO of Bulgari when it agreed to be acquired by LVMH in 2011, and later served as chairman and CEO of LVMH’s Watches and Jewelry division from 2011 through 2014.

Trapani also sat on LVMH’s board of directors from 2011 through 2016 and worked as an advisor to LVMH’s Chairman and CEO Bernard Arnault from 2014 through 2016. Trapani resigned from Tiffany’s board in November 2019, the day after LVMH acquired the U.S. jewelry giant.

Bluebell, which has been lobbying for change across a variety of industries and companies, including Hugo Boss, first tabled its request earlier this month. Trapani is a cofounder of Bluebell, although he no longer has shares, or operational involvement, in the company.

Richemont’s “A” shares are publicly traded, while the “B” shares are held by Rupert and his family. Rupert also has 51 percent of the voting rights and has the option to veto board members’ appointments.

According to Rupert’s letter, which was published Monday on Richemont’s website, holders of “B” shares are permitted to vote against the election of the representative of the “A” shareholders “if they have a valid reason to do so.”

The letter also points out that all the current board directors were elected by a majority of the votes cast by both “A” and “B” shareholders.

Rupert controls 10 percent of the company’s capital, and 51 percent of its voting rights. Although a management team runs Richemont, Rupert remains deeply involved in, and committed to, the business.

Bluebell first invested in Richemont around 18 months ago, and holds at least 1 million “A” shares.

As reported, Richemont is proposing that its shareholders elect Wendy Luhabe, a current member of the board who has previously chaired Vendôme South Africa as a non-executive director, instead of Trapani. Vendôme was previously a wholly-owned subsidiary of Richemont, and the two company boards were merged in 1999.

In Monday’s letter to shareholders, Rupert described Luhabe, who is based in South Africa, as an “ideal” candidate. He cited her extensive business and boardroom experience, as well as her contribution in the areas of diversity, equity and inclusion.

Rupert also noted that, until this year, Richemont’s board did not propose to elect one specific director to represent the holders of its “A” shares. He said Richemont considers that directors “must act in the interest of all shareholders, and not only of one class of them. Swiss law, however, entitles Bluebell to request the appointment of such a representative.”

He said that given the diverse makeup of the “A” shareholders, “neither Bluebell nor Mr Trapani has legitimacy to represent them as a group. For this reason, the board considers that its current independent directors are the best suited to serve as representatives of the ‘A’ shareholders on the board.”

Rupert also disagrees with Bluebell’s proposal to amend the composition of the board. Bluebell would like to see the minimum number of board members increased from three to six, and for each member to be named a representative of either the “A” or the “B” shares. The investor would also like to see an equal number of “A” and “B” representatives.

Rupert said that Bluebell’s proposals would potentially create “a regime in which directors are not expected to act in the best interest of the company and its stakeholders as whole, but only in the interest of either the ‘A’ or the ‘B’ shareholders.”

He added the proposals are “inconsistent with the board’s values of collegiality, and conception of company stewardship,” which have contributed to Richemont’s value creation over the past decades.

“The company’s capital structure makes it possible for Richemont to plan for the medium and long term, and to create value for shareholders, employees and their communities, while being protected from speculators’ short-term considerations and demands. Changing this structure would be immensely prejudicial to the company’s prospects,” Rupert added.




Richemont chairman Johann Rupert has urged Richemont’s shareholders to vote against the appointment of luxury veteran and activist Francesco Trapani to the board, citing his history with competitor LVMH Moët Hennessy Louis Vuitton, and describing him as an “inappropriate” candidate.

As reported, the activist investor Bluebell Capital Partners wants to install its cofounder Trapani, formerly chief of Bulgari and of the watch and jewelry division at LVMH, as the representative of the “A” shareholders on the board of Richemont with the aim of adding value to the Geneva-based luxury group.

Bluebell’s proposal will be put to a vote at Richemont’s AGM in Geneva on Sept. 7.

In the medium term, Bluebell would like to reshape Richemont and is lobbying for wider changes, including a strategic focus on hard luxury. The activist investor believes that, with certain changes, it could double its share price in the medium term.

Richemont shares were trading at 114.65 Swiss francs in mid-morning on Aug. 15. The company’s market capitalization is 59.85 billion Swiss francs.

Bluebell has described Trapani as “an undisputable leader in the jewelry and global and luxury goods industry with an exemplary track record.” It has said that having Trapani on the board would “significantly improve” Richemont’s governance, and contribute to the long-term success of the company.

In a detailed letter to shareholders, Rupert said that Bluebell has a relatively small stake in Richemont, parent of brands including Cartier, Van Cleef & Arpels, and Dunhill, and lacks the “legitimacy to represent all ‘A’ shareholders on the board.”

Rupert described Trapani as an “inappropriate candidate for election,” adding that he is “not independent, as he has a long history of close relationship with the LVMH group and its main shareholder.”

“LVMH is one of our company’s key competitors. The board may not responsibly recommend to shareholders to let a person who has a long history of association with that group – as well as a personal relationship with that group’s main shareholder – become a director of our company and intervene in our company’s decision-making process,” Rupert said.

Richemont’s chairman reminded shareholders that Trapani was CEO of Bulgari when it agreed to be acquired by LVMH in 2011, and later served as chairman and CEO of LVMH’s Watches and Jewelry division from 2011 through 2014.

Trapani also sat on LVMH’s board of directors from 2011 through 2016 and worked as an advisor to LVMH’s Chairman and CEO Bernard Arnault from 2014 through 2016. Trapani resigned from Tiffany’s board in November 2019, the day after LVMH acquired the U.S. jewelry giant.

Bluebell, which has been lobbying for change across a variety of industries and companies, including Hugo Boss, first tabled its request earlier this month. Trapani is a cofounder of Bluebell, although he no longer has shares, or operational involvement, in the company.

Richemont’s “A” shares are publicly traded, while the “B” shares are held by Rupert and his family. Rupert also has 51 percent of the voting rights and has the option to veto board members’ appointments.

According to Rupert’s letter, which was published Monday on Richemont’s website, holders of “B” shares are permitted to vote against the election of the representative of the “A” shareholders “if they have a valid reason to do so.”

The letter also points out that all the current board directors were elected by a majority of the votes cast by both “A” and “B” shareholders.

Rupert controls 10 percent of the company’s capital, and 51 percent of its voting rights. Although a management team runs Richemont, Rupert remains deeply involved in, and committed to, the business.

Bluebell first invested in Richemont around 18 months ago, and holds at least 1 million “A” shares.

As reported, Richemont is proposing that its shareholders elect Wendy Luhabe, a current member of the board who has previously chaired Vendôme South Africa as a non-executive director, instead of Trapani. Vendôme was previously a wholly-owned subsidiary of Richemont, and the two company boards were merged in 1999.

In Monday’s letter to shareholders, Rupert described Luhabe, who is based in South Africa, as an “ideal” candidate. He cited her extensive business and boardroom experience, as well as her contribution in the areas of diversity, equity and inclusion.

Rupert also noted that, until this year, Richemont’s board did not propose to elect one specific director to represent the holders of its “A” shares. He said Richemont considers that directors “must act in the interest of all shareholders, and not only of one class of them. Swiss law, however, entitles Bluebell to request the appointment of such a representative.”

He said that given the diverse makeup of the “A” shareholders, “neither Bluebell nor Mr Trapani has legitimacy to represent them as a group. For this reason, the board considers that its current independent directors are the best suited to serve as representatives of the ‘A’ shareholders on the board.”

Rupert also disagrees with Bluebell’s proposal to amend the composition of the board. Bluebell would like to see the minimum number of board members increased from three to six, and for each member to be named a representative of either the “A” or the “B” shares. The investor would also like to see an equal number of “A” and “B” representatives.

Rupert said that Bluebell’s proposals would potentially create “a regime in which directors are not expected to act in the best interest of the company and its stakeholders as whole, but only in the interest of either the ‘A’ or the ‘B’ shareholders.”

He added the proposals are “inconsistent with the board’s values of collegiality, and conception of company stewardship,” which have contributed to Richemont’s value creation over the past decades.

“The company’s capital structure makes it possible for Richemont to plan for the medium and long term, and to create value for shareholders, employees and their communities, while being protected from speculators’ short-term considerations and demands. Changing this structure would be immensely prejudicial to the company’s prospects,” Rupert added.

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