Richemont: management to change as profit fell

Richemont reported a 51% fall in six-month profit to €540 million ($599 million). Sales fell 13% to €5.1 billion. In September, Richemont had warned profit would be down about 45%.

“Sales and profits for the six-month period ended Sept. 30, 2016 were significantly below the prior year’s level, reflecting the difficult global environment, the exceptional inventory buybacks and challenging comparative figures in the first half of the previous financial year,” Executive Chairman Johann Rupert said in a statement.

On Friday luxury goods group said its board was making changes: CEO Richard Lepeu and CFO Gary Saage will step down along with nearly a third of its board members next year. Lepeu would retire at the end of March while Saage will retire at the end of July.

The Geneva-based group said Chairman Johann Rupert would stay on as the struggling luxury firm restructured the responsibilities of senior management. It has not yet named a successor to Chief Executive Richard Lepeu, who the group said will retire in March.

Richemont also said it would address watch overcapacity after net profit nosedived in the six months to September, hit by one-off restructuring charges and product buy-backs.

"Concerning watches, we will look to deal with overcapacity issues, adapting manufacturing structures to the level of demand," the maker of Cartier jewellery and IWC watches said.