Richemont Investor Adds to Calls for Action on YNAP
November 09 2021 - 3:04AM
Dow Jones News
By Joshua Kirby
Compagnie Financiere Richemont SA's struggling e-commerce
business is holding back the Swiss luxury group's share price
according to one shareholder, adding to pressure for management to
sell or spin off the unit.
There is "significant unrecognized value" within Richemont,
Artisan Partners told The Wall Street Journal on Monday.
"In our own estimation, the key source of undervaluation relates
to the company's e-commerce business, which currently is
loss-making," said the U.S. investment-management firm's managing
director, Eileen Kwei.
"We are long-term investors focused on superior businesses with
high returns, a strong balance sheet and management teams with a
track record of creating value," she said, adding that the fund has
held a stake in Richemont for many years and is supportive of the
company's chairman and controlling shareholder, Johann Rupert.
Artisan Partners holds around 1.4% of Richemont's share capital,
according to FactSet.
The comments come after media reports that New York-based
activist investor Third Point has taken a sizable stake in
Richemont and is pushing for action to boost the share price, which
in recent years hasn't matched the rapidity of growth seen at many
peers in the luxury sector. Third Point and Richemont both declined
to comment on the reports, which boosted the group's share by close
to 4% on Monday.
Analysts pointed to Richemont's Yoox-Net-A-Porter e-commerce
platform as a drag on operating income and therefore on the
company's share price. Divesting YNAP would allow the group to
focus on its high-performing brands, as well as giving the group
more firepower for potential acquisitions, Bernstein analyst Luca
Solca said.
Ms. Kwei of Artisan Partners said that over time, YNAP will
either have to become a profitable asset, or Richemont will have to
turn it into "consumable capital."
"Other investors in the market are beginning to recognize that
possibility," she said.
Write to Joshua Kirby at joshua.kirby@wsj.com;
@joshualeokirby
(END) Dow Jones Newswires
November 09, 2021 02:49 ET (07:49 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
Compagnie Financiere Ric... (PK) (USOTC:CFRUY)
Historical Stock Chart
From Dec 2024 to Jan 2025
Compagnie Financiere Ric... (PK) (USOTC:CFRUY)
Historical Stock Chart
From Jan 2024 to Jan 2025