Cartier CEO on his way out
Cyrille Vigneron, the CEO of Cartier, is to leave the French jeweler in 2025 at the latest, according to several sources close parent Richemont. It’s not because of poor trading at Cartier, since the brand is still growing in spite of the current downturn in luxury spending. The main reason is that relations between Vigneron and Richemont Chairman Johann Rupert have soured in recent months, the sources say.
Vigneron is being hamstrung by the Richemont group in many areas, whether it’s investments by the brand, new products or marketing campaigns. At a budget meeting late last month, Rupert and Vigneron locked horns yet again, sources close to the group said.
“I think relations have never been so bad,” one of the sources said. “Tensions between Rupert and Vigneron are at an all-time high.”
Richemont declined to comment.
Rupert is known for his strong character and for shouting at executives during meetings. Vigneron, like every senior manager at Richemont, had grown used to it. Only today he’s finding it increasingly difficult to cope with Rupert’s public humiliations, people close to the group said. Vigneron has an incentive to stay in his job at least until 2025 since that’s when he gets the maximum payout and stock options he is due to receive. In the year to March 31, Vigneron’s remuneration totaled 5.4 million Swiss francs.
If relations are so bad that the two men can no longer continue working together, it’s possible that Vigneron may agree on a deal with Rupert and leave earlier, several industry sources said. Talk about the expected departure of Cartier’s CEO has become a recurring theme in the watch and jewelry industry. So much so that in a note last month, broker HSBC flagged the risk that Vigneron could be leaving. “We believe the departure of Cyrille Vigneron, the current Cartier CEO, from the group could be considered problematic by the market,” HSBC wrote in the note, referring to the risks the brand faced.
Cartier is the world’s biggest jewelry brand, generating close to €10 billion in annual turnover. It also represents more than 70 percent of Richemont’s operating profit. Hence what happens to Cartier’s leadership team is a top concern for investors.
Among other things, Rupert has criticized Vigneron for finding the time to publish posts on social media in which he philosophizes about beauty, luxury and management. In one post on LinkedIn, Vigneron discussed the “paradoxes of change and stability.” He wrote: “The more significant the change the more stability it needs. Changing a luxury brand strategy needs time to bear visible fruit. Continuity in management and policy are critical to bring results. Changing directions too often only brings confusion.”
If Vigneron leaves in 2025, he will have been at Cartier’s helm for a decade, since he started at the brand on Jan. 1, 2016. By then he will be 65. Before taking the executive reins at Cartier, Vigneron was President of LVMH Japan and worked for Richemont from 1988 to 2013, mostly at Cartier where he was managing director of Cartier Japan and managing director of Cartier Europe.
WHO COULD REPLACE VIGNERON?
Several candidates have been lining up to replace Vigneron. Louis Ferla, Vacheron Constantin CEO, is the most likely to step into his shoes, sources close to the group say. Last year, Ferla won the CEO of the year prize for bringing Vacheron Constantin’s annual sales to €1 billion. Rupert and other Richemont managers fêted him for it in his homeland in South Africa. Ferla has solid experience at Cartier. Before taking the helm at Vacheron Constantin, he spent more than 11 years at the French jeweler, where he was International Director Clients and Business Development and a member of the executive committee.
“For me, there is no doubt that Louis Ferla is the best positioned to succeed Vigneron,” a former senior Richemont executive told Miss Tweed on condition of anonymity. “He ticks the box of success with Vacheron Constantin and knows Cartier well.”
Ferla is an affable man, loved by his teams at Vacheron Constantin. If Ferla takes up the top job at Cartier, internal sources at Richemont expect that the new CEO of Vacheron Constantin will be Laurent Perves, currently the watch brand’s Chief Commercial Officer. “He is widely regarded as Ferla’s anointed successor,” one person close to the brand said.
However, there are other candidates vying to land the Cartier CEO job. Renaud Litré, the brand’s Chief Commercial Officer and Richemont’s Platform Officer, is also jockeying to position himself as a potential successor to Vigneron. He has the double responsibility of looking after Cartier’s international operations and overseeing Richemont’s e-commerce and IT. Litré is currently handling the debacle with online fashion retailers Farfetch and Yoox-Net-A-Porter. Following the collapse in Farfetch’s share price, Richemont has put on pause a deal to sell a minority stake in YNAP to Farfetch and adopt the company’s technology for its brands’ e-commerce sales.
Industry sources believe it’s a shame that Richemont is not going forward with this deal, having spent so many management hours finalizing the complex transaction in August 2022. Also, despite its financial troubles Farfetch has one of the best e-commerce technologies in the world. It would have set Richemont’s brands apart from rivals. Rupert could have just acquired Farfetch, which is now worth $412 million. It would appear that Richemont’s chairman got cold feet and wants to distance himself from Farfetch. Last week, the Swiss group said it was not planning on lending money to Farfetch or investing in the company and was reassessing the deal they agreed in 2022. It received regulatory approvals in October.
Litré reports directly to Rupert on Farfetch. That gives him extra power in relation to Vigneron. “Litré is now the strong man between Cartier and the group, and he has been overshadowing Vigneron,” said one person close to the Richemont group. Litré’s fortunes may be strongly influenced by the outcome of talks between Farfetch and Richemont, sources close to the group say.
Another potential candidate to replace Vigneron is Emmanuel Perrin, CEO of Richemont’s Specialist Watchmakers division and President of the Fédération de la Haute Horlogerie, which helps organize the annual trade fair Watches & Wonders at Palexpo in Geneva. Perrin is the nephew of Alain-Dominique Perrin, a legend at Richemont who was the group’s CEO and led Cartier for many years. ADP, as people in the industry call the 81-year-old former executive, remains an influential figure. He currently works as a consultant for Richemont. ADP will be lobbying hard for his nephew to take the top job at Cartier. However, Emmanuel Perrin is not the most loved boss at Richemont. Many industry sources believe that he does not stand much of a chance to replace Vigneron.
Whoever lands what is the most coveted CEO job in the jewelry industry will have to redouble efforts to develop Cartier’s watches, industry experts say. The brand has been resting on its laurels somewhat. It keeps relaunching old models such as the Pasha and the Santos. The last major launch of a new watch model was the Drive in 2016 but it has not been a major commercial success.
In jewelry, Cartier makes the bulk of its sales with its Love, Juste un Clou and Trinity collections. The Clash collection, launched two years ago, has been doing well but has not been a huge commercial success, industry sources say.
Beyond Cartier, Richemont has other important human resources issues to solve. Two brands at the group have been without a CEO for several months. Montblanc’s CEO Nicolas Baretzki left after a decade in the job, eager to embark on a new adventure, industry sources said. He has been replaced on an interim basis by Philippe Fortunato, who is in charge of Richemont’s Fashion and Accessories division, they added.
Watchmaker Roger Dubuis lost CEO Nicola Andreatta a few months ago and it’s not yet clear who will replace him. Emmanuel Perrin has been managing the brand since Andreatta’s departure.
However, beyond Cartier and brands without a CEO, the one question investors would like answered is who will replace Rupert. The 73-year-old South African billionaire continues to decide everything at Richemont. He is also leading the charge on the group’s plans to build a fragrance and cosmetics unit.
“We are getting many questions around succession planning at Richemont,” HSBC said in its note last month. “Some investors have been surprised at how dominant Chairman Johann Rupert remains in terms of decision making and communication.”
Rupert has said that none of his three children would succeed him and has refused to provide any detail on who could replace him one day. His succession remains one of the many mysteries surrounding Richemont, together with what is the group’s vision now with regards to e-commerce and partnership with Farfetch. It may not be too late to save the deal.