The way to win with fashion reality TV
The announcement that came along with Richemont’s 2012 annual results that chairman Johan Rupert (left), is taking a year off from running the world’s second biggest luxury company starting this September, is by far, to me at least, the most interesting part of the statement.
I know plenty of employees take sabbaticals (we at the FT get a month off every four years to recharge and, maybe, write book proposals) but for a man who has built the largest watch and jewellery group to take a year off at age 62 – which, let’s face is not so old — at a time when the exponential growth trajectory of the luxury sector has started to slow is a little, well, surprising. Indeed, Luca Solca, of Exane BNP Paribas, told Reuters it was “less positive” news than the numbers.
Could it be a direct response to the idea that luxury is increasingly considered not just gold, diamonds and silk, but time? Could it be an industry-redefining move? Well, probably not. But it does lead to all sorts of interesting speculation.
It sparks, for example, questions (beyond the usual Steve Jobs/health-related stuff, which is not suggested here) like: is Mr Rupert retiring? Is this a way to lay the ground work and get the market used to other people being in charge without actually going so far as to retire? Is he testing his successors to see how they handle things in his absence?
Given that Bernard Fornas and Richard Lepeu only recently took over as co-CEOs, it seems possible. Especially because luxury is so addicted to the charismatic men, aka industry visionaries, that built the big groups, and have become synonymous with their assortment of brands, be it Bernard Arnault and LVMH, Francois-Henri Pinault and PPR, or Mr Rupert and Richemont. The idea that one of them would leave is sure to rock perception a bit. Though much has been made of how they transformed family shops into professionally run businesses, there’s still a connection between products and the executives that love them that makes luxury seem more emotionally charged than, say, soap. Or refrigerators.
In this context, Mr Rupert’s gap year could be a super-clever strategy to get all his ducks in a row before actually stepping down. Then, when that happens, everyone will be so used to the new status quo, no shareholders will blink.
On the other hand, things in luxury are tough, especially in Asia. Though Richemont reported 12 per cent sales growth in April, vs 9 per cent in the year ending March, they also said, “one month of sales should not necessarily be taken as an indication of the year as a whole.” So it’s not necessarily the best time for a leader to take off, though it could also be a time when new thinking is required. Or maybe he’s going off to clear his head so he can come back full of new ideas for growth. Rupert himself says he is just taking “a break” and wants to read books and travel to Antarctica. Fun for him!
Which raises the alluring possibility that it is all as stated, and Mr Rupert is simply in a secure enough position that he feels he can take a year off to recharge. It is, after all, a form of luxury, which Mr Rupert knows something about. Maybe it will lead to a new cottage industry specialising in just such “grey gap years”? Or the discovery of exciting new jewellery possibilities in remote lands?
It’s unclear, but here’s what I bet: it sparks a host of op-eds from executive consultants on the pros and cons of this sort of move for an organisation.