Richemont says the ex-Bulgari boss is “inappropriate” for the board

Richemont, maker of Cartier jewelry, said shareholders should vote against the appointment of Francesco Trapani to the board because he is too closely linked to arch-rival LVMH.

In an escalation of the battle between the luxury group and activist investor Bluebell Capital Partners Ltd., which proposed the appointment, Richemont said Trapani is an “inappropriate candidate” and that his selection is not in the company’s interest.

Richemont’s chairman Johann Rupert controls the high-end group through his ‘B’ class shares. The South African billionaire holds 10 percent of the company’s share capital and 51 percent of the voting rights, according to the company’s latest annual report. The ‘A’ shares are listed and have a greater financial interest, but lower voting rights than Rupert.

Bluebell, which has a history of taking on major European companies, wants a representative for its ‘A’ shareholders and proposed ex-Bulgari boss Trapani, who led the jewelery brand for almost three decades until 2011. Trapani was also one of the founders by Bluebell in 2019.

Richemont said on Monday that Bluebell, which has a relatively small stake, lacks the “legitimacy” to represent the ‘A’ shareholders.

The luxury group’s shares were little changed in early Swiss trading, and have fallen 17 percent this year.

Bluebell’s likelihood of succeeding in shaking up Richemont’s board has been met with skepticism by analysts because of Rupert’s firm grip on the Swiss company. Bluebell was not immediately available for comment.

Richemont objects to Trapani because he was chief executive of Bulgari when it was acquired by LVMH and served as chairman and chief executive of the rival’s watches and jewelery division between 2011 and 2014. Trapani also sat on LVMH’s board for a period and acted as an adviser for the luxury group’s founder and CEO Bernard Arnault.

“LVMH is one of the company’s most important competitors,” Richemont said in a letter to shareholders. “The board cannot responsibly recommend to shareholders that a person who has a long association with that group – as well as a personal relationship with that group’s main shareholder – become a director of our company and intervene in the company’s decision-making process.”

Richemont already has the “best jewelry and luxury experts in-house, both on the board and in day-to-day management,” making any contribution from Trapani unnecessary, the company said.

In its 34 years of existence, no investor had ever asked for a representative of those who own ‘A’ shares, the company said, adding that all directors act in the interests of all shareholders. However, in response to Bluebell’s proposal, it has recommended that current board member Wendy Luhabe be appointed as the representative of the ‘A’ shareholders.

Luhabe has been on Richemont’s board since 2020 and has served in a number of roles in major South African companies.

Only holders of ‘A’ shares will be entitled to vote on this agenda item and the candidate with the highest number of votes will be appointed.

Learn more:

Activist investor fights for wider representation in Richemont

Activist shareholder Bluebell Capital Partners claimed a partial victory in its bid to overhaul the management of luxury group Richemont after the company proposed the appointment of a director to look after the interests of ordinary shareholders.

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