Bernard Arnault invests in Richemont

Richemont, the Swiss luxury giant and parent company of Cartier, reportedly received a slight personal investment from the CEO of its competitor LVMH, Bernard Arnault, on Tuesday, June 25. According to sources close to the French billionaire, he invested a « small » amount as part of a broader family portfolio of investments in publicly traded companies. Although the acquired stake is described by the source as purely for investment purposes, it is logical to raise questions given the power of the man nicknamed « the wolf in cashmere » and his growing expansion in recent years.

The news was announced by Bloomberg BusinessWeek and Richemont reportedly saw a 4% increase in its stock following speculation about its acquisition by the French competitor. It seems this is not the first time the LVMH CEO has made such « friendly » contributions to a luxury competitor still independent of his empire. Recall the French luxury house Hermès in 2010, fending off LVMH and its discreet share derivatives, which led the company to hold 23% of the shares. Johann Rupert, the New Zealand billionaire behind Richemont, has also declared his desire for independence in recent years. Although he owns only 10.2% of the group's capital, he holds 51% of the voting rights, giving him control over the future of his company and a good defense against unwanted buyers. He would be the main obstacle to this acquisition by Bernard Arnault, who praised Richemont and its leader last January, surprisingly declaring: « I have no desire to disrupt his strategy, I understand he wants to remain independent and I think that’s very good. And if he needs support to maintain his independence, I’ll be there. »

LVMH ranks as the third most valuable company in Europe, with a market capitalization of around 366 billion euros. In comparison, Richemont boasts a valuation of 84.7 billion Swiss francs, or approximately 88.5 billion euros. This acquisition by Bernard Arnault would propel LVMH into an entirely different sphere that could attract the attention of antitrust authorities, punishing competitive monopoly. The group acquired Tiffany and Co three years ago for 16 billion euros, and already owns jewelry brands such as Bulgari, Fred, Chaumet, Repossi, as well as the jewelry lines of Louis Vuitton and Christian Dior Couture. If it were to get hold of Richemont’s portfolio with Cartier and Van Cleef & Arpels, the group would rise to an almost unassailable position in the luxury and high-end goods sector. Although Johann Rupert reported in May the change of CEO by appointing the current head of Van Cleef & Arpels, Nicolas Bos, he announced that he would not be stepping back.