Richemont urges shareholders to vote against ex-Bulgari CEO, says he's inappropriate for board

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A Van Cleef & Arpels store, which is in the Richemont stable. Photo: Richemont
A Van Cleef & Arpels store, which is in the Richemont stable. Photo: Richemont

Richemont, the maker of Cartier jewellery, said shareholders should vote against the appointment of Francesco Trapani to the board because he is too closely associated with arch-rival LVMH. 

In a ratcheting up of the battle between the luxury group and activist investor Bluebell Capital Partners, which proposed the appointment, Richemont said Trapani is an “inappropriate candidate” and his election is not in the interest of the company. 

Richemont Chairman Johann Rupert controls the high-end group through its ‘B’-class shares. The South African billionaire holds 10% of the company’s share capital and 51% of its voting rights, according to the company’s most recent annual report. The ‘A’ shares are publicly traded and have a bigger economic interest but lower voting rights than Rupert. 

Bluebell, which has a history of taking on large European companies, wants a representative for the ‘A’ shareholders and proposed ex-Bulgari Chief Executive Officer Trapani, who led the jewelry brand for nearly three decades until 2011. Trapani was also a founding partner of Bluebell in 2019.

Richemont said Monday that Bluebell, which has a relatively small stake, lacks the “legitimacy” to represent the ‘A’ shareholders.

READ | 'I will not be blackmailed': Johann Rupert refuses to change Richemont board

The luxury group’s shares were little changed in early Swiss trading, and have fallen 17% this year. 

Bluebell’s likelihood of success in shaking up Richemont’s board has been met with skepticism by analysts because of Rupert’s firm grip on the Swiss company. Bluebell wasn’t immediately available to comment.

Richemont objects to Trapani because he was the CEO of Bulgari when it was acquired by LVMH and served as chairman and CEO of the rival’s watches and jewelkery division between 2011 and 2014. Trapani was also on LVMH’s board of directors for a period and acted as an adviser to the luxury group’s founder and CEO Bernard Arnault. 

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

Richemont already has the “best jewellery and luxury experts in-house, both on the board and in the executive management,” making any contribution by Trapani unnecessary, the company said. 

In 34 years of existence no investor had ever asked for a representative for those owning ‘A’ shares, the company said, adding that all board directors act in the interest of all shareholders. In response to Bluebell’s motion, however, it has recommended current board member Wendy Luhabe be designated as the representative of the ‘A’ shareholders. 

Luhabe has been on Richemont’s board since 2020 and has served in a number of roles in large South African companies. 

Only holders of ‘A’ shares will be entitled to vote on this agenda item and the candidate with the highest number of votes will be appointed.

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