Richemont Gains on Report Activist Investor Dan Loeb Took Stake

(Bloomberg) -- Richemont shares rose to a record after a report that activist investor Dan Loeb’s Third Point LLC built a stake in the Swiss luxury-goods company, spurring speculation of a shakeup that could boost its lagging stock price.

Third Point is now engaging with Richemont, Miss Tweed, a luxury news website, reported Sunday, without saying where it got the information. A Richemont spokeswoman declined to comment. Third Point didn’t immediately respond to a request for comment. 

The stock rose as much as 4.6% Monday.

The owner of Cartier and Van Cleef & Arpels has returned about 15% annually over the past five years, less than half the return of its bigger French rivals, LVMH and Kering. Richemont Chairman Johann Rupert controls 50% of the company’s voting rights at the company, which has a market value of 72 billion francs ($79 billion). 

Miss Tweed reported in October that Richemont was considering several options for its e-commerce unit Yoox Net-a-Porter, and in March the website said that it had turned down an informal takeover offer from Gucci owner Kering. After Richemont bought out Yoox Net-a-Porter SpA for 2.7 billion euros ($3.1 billion) in 2018, analysts have lamented the unit’s slow pace toward profitability.

Richemont has undergone repeated management shakeups over the last five years, involving both top personnel and the heads of its brands. The company spent more than a decade trying to build up fashion and accessories labels like Chloe and Dunhill, but traction remained limited, leading to the divestments of Lancel and Shanghai Tang.

The bulk of Richemont’s growth over the last few years has been shouldered by its jewelry business. 

Loeb last month unveiled a stake in Royal Dutch Shell Plc and said he’s pushing for a breakup of the energy giant. He has invested in Switzerland before, taking a stake in Nestle SA in 2017.

Artisan Partners, which owns a 1.2% stake, has also been pushing Richemont to improve its performance, the Financial Times said Sunday.
 

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