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The Swiss luxury group Richemont announced several changes to its non-executive board this week and created two new positions: corporate affairs director and CEO of a newly created fragrance division. Both will join the group’s Senior Executive Committee. It is great news that Richemont is boosting its corporate governance and has made fragrance a new area of focus. The move mirrors similar efforts by the rival French group Kering which is investing heavily in this promising category.

Richemont will not stop there. More top management changes are on the cards, particularly at Richemont’s Specialist Watch Makers’ division and at jeweler Buccellati, Miss Tweed found out. Some bosses are on their way out while others are preparing to move to another brand within the group, several industry sources said.

BUCCELLATI

Catherine Rénier, CEO of Richemont’s Jaeger-LeCoultre since 2018, is expected to leave her position in the next six months to join Buccellati, the Italian jeweler favored by European royals and celebrities. “Rénier is a recurring name to takeover Buccellati,” one industry source told Miss Tweed. Since its purchase in 2019 for €230 million, Richemont has been investing vast amounts in the Italian jeweler. Buccellati’s revenue stood at €45 million when it was acquired by the group. Thanks to new boutiques, notably in Asia, and the expansion of its teams and marketing resources, it is now estimated to generate more than €180 million in revenue.

Last year, Buccellati “generated the highest growth rate across the group, albeit from a smaller base” than its much bigger sister brands Cartier and Van Cleef & Arpels (VCA), Richemont wrote in its 2023 annual report. Best-selling collections include Tulle, which is recognizable thanks to its honeycomb design made to look like lace, and Macri, whose surfaces are engraved with thin lines to resemble silk. Founded in 1919 by Mario Buccellati, the brand is regarded today as a classic expression of timeless elegance in jewelry. It is distinctly European and designed to adorn aristocrats. It has also been run in the same way for years. Very little has changed since it joined Richemont and came under the supervision of Nicolas Bos, CEO of VCA, an expert in preserving brand equity and spirit. Several Buccellatis are members of the founding family and work for the company: Andrea, honorary chairman and creative director, Maria Cristina, head of communication, and Luca, who looks after business development.

Bucellati has been led by Italian luxury veteran Gianluca Brozzetti for nearly a decade now. The seasoned executive will be 70 in March next year. He is well over Richemont’s official age limit for CEOs of 65 and is due to retire next year, several industry sources have said. It is expected that Rénier will first join Buccellati as Brozzetti’s deputy and take over after a transition period of several months. Her departure from Jaeger-LeCoultre has not been announced yet and it may be some time before it is, several sources said. The timing of her official appointment will also depend on how quickly Richemont finds a replacement. Many wonder whether Richemont will pick one of its senior managers or someone from outside the group or even the hard luxury sector. Earlier this year, Audemars Piguet surprised the industry by appointing as its new CEO Ilaria Resta, an executive at the Swiss fragrance group DSM-Firmenich.

Rénier worked for VCA and Bos for many years, mainly as head of the French jeweler in Asia Pacific. “Catherine is a woman under Nicolas’ protection. He’s the one who pushed for her to become CEO of Jaeger. He’s not going to let her down,” a source close to Richemont said. “However, taking over Buccellati will not be easy for Catherine as the brand is managed in a very patriarchal, top-down fashion.”

Several industry sources said Jaeger-LeCoultre’s sales growth has been lackluster in recent years. Watch retailers and connoisseurs said its best-selling Reverso model remained popular mainly in Western Europe and it was struggling to impose itself in Asia and elsewhere.

PANERAI

Another Richemont watch executive due to exit the group in the next few months is Benoit de Clerck, Chief Commercial Officer at the watchmaker Officine Panerai, industry sources said. That confirms media speculation over the summer. He is going to become CEO of LVMH’s Zenith, replacing Julien Tornare, who is leaving to become CEO of TAG Heuer. Frédéric Arnault, who was CEO of TAG Heuer, will take up a new role within the French group headed by his father Bernard, several industry sources said. Miss Tweed will publish more details regarding these musical chairs in a separate report.

These management changes come as the watch industry is suffering from a slowdown that started in January. After the post-pandemic boom of 2021 and 2022, demand is falling back to more normal levels. Also, sales in China have not picked up as much as hoped and U.S. consumers have been keeping their purse strings tight in an inflationary environment of rising interest rates. When business gets tough, shareholders start questioning management and its strategy. That’s also why so many leadership changes are planned at Richemont and at other groups such as LVMH.

However, replacing a leader who has been a brand’s father figure for many years is no easy task. Panerai, for example, has struggled to find a new voice after its charismatic leader Angelo Bonati left in 2018 after 17 years. Bonati led the brand’s storytelling and identity built around exploration and adventure. Under the current Richemont regime, there is less room for out-of-the box ideas and larger-than-life characters like Bonati. Panerai has become more subdued under Jean-Marc Pontroué, one of the many watch brand CEOs under the tight control of top Richemont executives – something Bonati avoided for years.

ROGER DUBUIS

Pontroué previously was CEO of Roger Dubuis, one of the smallest brands of the Specialist Watchmakers’ portfolio. It is estimated to make between €70 million and €100 million in annual revenue. The current Roger Dubuis CEO, Nicola Andreatta, is leaving Richemont at the end of November after five years, several industry sources have said. Founded in 1995, Roger Dubuis has been through several CEOs in the past decade. Its timepieces are known for their skeleton movements, avant-garde designs and prices between €65,000 and €130,000 -- a hefty sum for a brand that is not so well-known or popular among collectors. Some expensive Roger Dubuis models can be found at a discount to their official retail price on the second-hand market as many retailers are desperate to offload them to get cash into their coffers.

Richemont’s watch brands, which also include Piaget and IWC, have been through rough trading waters this year, several industry sources have said. An executive at a successful independent Swiss brand told Miss Tweed at the Geneva Watch Days that there were fewer problems securing watch parts thanks to IWC canceling orders in recent months. “The problem for some creates happiness for others,” the executive said with a smile. There are also question marks over the future of some members of the IWC’s leadership team, market sources have said.

Richemont watch brands have seen prices on the second-hand market collapse since last year. Big spenders have become reluctant to buy an expensive timepiece from a brand that some see as relatively dormant in terms of design and innovation. Also, the market’s polarization has gained pace. Leading brands have become even bigger and more desirable. In the current uncertain environment, buyers have been opting for safe names such as Rolex, Audemars Piguet, Patek Philippe, Richard Mille, Rolex’s Tudor and the independent Breitling. At Richemont, the only brands that continue to enjoy solid growth are A. Lange & Söhne and Vacheron Constantin. The latter has been helped by the reopening of China post-Covid, a country in which its rival Patek Philippe is poorly distributed. For its part, A. Lange & Söhne benefits from the fact that demand still outstrips supply for many of its models.

Also, many big brands — including Richemont ones — are having a hard time competing against smaller watchmakers. These independent brands can be more creative. They are also doing a better job building relationships with customers. People are tired of being told they cannot buy a Rolex, a Patek Philippe or another popular brand because there is officially no stock in the boutique. Best sellers are kept for privileged customers who have already bought many watches from them. Therefore, customers have been falling back on more niche and innovative brands.

CENTRALIZED DECISION-MAKING

Richemont’s watchmakers’ woes are not only due to tough market conditions and fierce competition from smaller brands, sources close to the group say. Centralized decision-making by top Richemont executives and the group’s Strategic Products and Communication Committee (SPCC) are also an issue. Together, they form a tight leash that controls Richemont’s watch brands and their bosses. Such governance leaves little room for creativity, innovation and zany ideas – qualities that feed brand desirability and awareness.

All power is in the hands of Richemont CEO Jérôme Lambert and Emmanuel Perrin, CEO of the Specialist Watch Makers division, distributors say. Watch CEOs have little freedom and room to maneuver. Lambert is the nephew of Alain-Dominique Perrin, the man who built Cartier into the world’s No. 1 jeweler. The industry legend, who celebrated his 80th birthday last year, still acts as a consultant for the group and has been advising the SPCC. Both Lambert and Emmanuel Perrin are said to be risk-averse. That’s why so many of the group’s watch brands are struggling to remain competitive and come up with original and smart initiatives that would help them stand out on the crowded luxury watch market, industry analysts say. “There are a lot of incredible brands at SWM that cannot express themselves properly because of the way the group is run,” one person close to Richemont said on condition of anonymity. The brands that are doing best are those whose CEOs have been able to hold their ground and resist Perrin’s intervention.

“The heads of Vacheron Constantin and Lange are the most resilient,” the source said. “They have a clear strategy and it’s working. So, there’s no reason to bother them. It’s when business isn’t doing so well that Perrin steps in,” the source said, referring to brands such as Jaeger-LeCoultre, Roger Dubuis, Panerai, IWC and Piaget.

Also affecting sales is the way Richemont has been treating third-party distributors. The group has been building its own network of boutiques and shutting down accounts with multi-brand retailers. Last week, Miss Tweed reported on how Richemont was expected to part ways with Bucherer after the Swiss retailer was acquired by Rolex.

Richemont watch bosses under centralized command from the top, have also been alienating distributors by showing them new releases at meetings and watch fairs and then telling them that they cannot order them because they will be sold exclusively at the brand’s own boutique. “Many distributors are tired of being badly treated by Richemont and that’s not helping sentiment towards the group and the performance of its brands,” one senior watch CEO told Miss Tweed at the Geneva Watch Days.

Miss Tweed reported in 2020and in 2021 that managers at the Specialist Watch Makers division enjoyed little freedom and felt hamstrung by Perrin and Lambert. In retaliation, the two executives blacklisted Miss Tweed from all Richemont events, press conferences and the annual Watches & Wonders trade fair, preventing this independent Paris-based news website from talking to non-Richemont brands participating in the show. On Friday, Richemont again did not answer Miss Tweed’s emails asking for comment or clarifications for this report.