The decision is to become effective after Richard Lepeu, Richemont’s current CEO, retires in March 2017.

The increasing market volatility in the luxury sector has impacted the Group, whose sales have been declining over the past two years albeit a “modestly positive” performance in October 2016 with an improvement in business in Mainland China and Hong Kong. Excess inventory in some regions has led the company to buy back stock from retailers.

“It is impossible to replace Richard and appoint a new person who will take care of 35 direct reports,” said Johann Rupert, Chairman and controlling shareholder of Richemont. “The board is really there to allocate capital and human resources, this is a more sensible and fairer structure”, he added.

Georges Kern, currently CEO of IWC Schaffhausen, has been appointed as Head of Watchmaking, Marketing and Digital, while Jérôme Lambert, currently CEO of Montblanc, becomes Head of Operations, responsible for central and regional services and all sections other than jewellery and watchmaking.

During a call with analysts, Rupert said he wanted a generational change as almost all of Richemont’s board members are over 50 and there is only one woman. “I want to see less gray haired men and less gray haired Frenchmen, we have too few women and not enough diversity, not enough Asians or Americans” he said.

Shop closures and buybacks cost an estimated €249 million. As a result, six-month sales are reported to have dropped 12% at constant rates to €5.1 billion, while net profit dropped 51% to €540 million.

Richemont’s brands include Lancel, Vacheron Constantin, A. Lange & Sohne, Piaget, Azzedine Alaia, Baume & Mercier, Cartier, and Chloe.

Source: Fashion Network