Richemont investors back founder in fight against activist Bluebell

Richemont shareholders have rejected activist investor Bluebell Capital’s campaign to shake up the board of the Swiss luxury group, handing a victory to billionaire founder Johann Rupert.

In a vote on Wednesday, shareholders overwhelmingly voted against Francesco Trapani, a veteran luxury executive who Bluebell had nominated to be a board director, and preferred Richemont’s choice, Wendy Luhabe, who was already on the board.

They also voted down two other resolutions proposed by Bluebell that sought to restore more power to holders of the A shares, which carry fewer voting rights than the B shares owned by Rupert’s family holding company.

Bluebell, which has been part of successful campaigns at foodmaker Danone and chemicals group Solvay, had accused Rupert of behaving like a “padre-padrone” or godfather-like figure, who makes most decisions at Richemont even though he owns only a 9.1 per cent stake.

The family holding company’s B shares carry 50 per cent of the voting rights in the owner of Cartier and Van Cleef & Arpels.

“I’m happy to see that our shareholders trust the management,” said Rupert, who serves as chair of Richemont, after the vote, according to Reuters.

Richemont’s management, as well as shareholder advisory groups ISS and Glass Lewis, had recommended voting against Bluebell’s resolutions including the nomination of Trapani. The company had argued that the former Bulgari and Tiffany & Co executive was too closely associated with rival LVMH, which owns both brands, so it would be a risk to have him on the board.

Bluebell executive Giuseppe Bivona said the fund planned to continue to push for changes at Richemont.

“We are very patient,” he said in an interview. “We will stay as shareholders as long as it takes for Rupert to realise that he does not own the company and must answer to shareholders.”

He also cast the outcome as a small step forward because Richemont had nominated a board member to represent the A shareholders for the first time, as required by the company’s bylaws but never applied.

Beyond the governance issues, Bluebell’s campaign had criticised Richemont’s strategy and called for the group to focus on lucrative jewellery and watches instead of its unprofitable ecommerce operation and fashion brands such as Chloé.

Richemont shares have delivered total returns of about 60 per cent in the past five years, compared with the roughly 200 per cent at luxury rivals Hermès and LVMH and 80 per cent for Kering, according to Refinitiv data.

Shares in the group were down about 0.5 per cent in mid-day trading, largely in line with the Swiss market.