Jérôme Lambert ( COO )
55-457: Compagnie Financière Richemont S.A. , commonly known as Richemont , is a Switzerland-based luxury goods holding company founded in 1988 by South African businessman Johann Rupert . Through its various subsidiaries, Richemont produces and sells jewellery, watches, leather goods, pens, firearms, clothing, and accessories. Richemont is publicly traded as CFR on the SIX Swiss Exchange and
110-424: A luxury good (or upmarket good ) is a good for which demand increases more than what is proportional as income rises, so that expenditures on the good become a more significant proportion of overall spending. Luxury goods are in contrast to necessity goods , where demand increases proportionally less than income. Luxury goods is often used synonymously with superior goods . The word "luxury" derives from
165-746: A Swiss company that holds shares controlled and principally owned by Johann Rupert, was the only significant shareholder of Richemont with 3% or more of the voting rights. It held 6,263,000 Richemont Class "A" shares and 522,000,000 Richemont Class "B" registered shares, representing 10% of the equity of the company and controlling 51% of the company's voting rights. Richemont's portfolio is made up of Maisons (brands). The following companies are wholly owned subsidiaries of Compagnie Financière Richemont S.A., unless otherwise noted. Richemont acquired British clothing retailer Hackett Limited in 1992. On 2 June 2005, Richemont announced its sale to Spanish investment company Torreal S.C.R., S.A. In 1998, Richemont bought
220-508: A certain income level. Examples would include smoked salmon , caviar , and most other delicacies . On the other hand, superior goods may have a wide quality distribution, such as wine and holidays . However, though the number of such goods consumed may stay constant even with rising wealth, the level of spending will go up to secure a better experience. A higher income inequality leads to higher consumption of luxury goods because of status anxiety. Several manufactured products attain
275-639: A controlling stake in Shanghai Tang . In July 2017, Richemont announced that it had sold Shanghai Tang to a group of investors headed by Italian entrepreneur Alessandro Bastagli. In 2000, the Group sold its minority stake in Vivendi , representing its exit from all previous media interests, which had included NetHold and Canal+ . Richemont and Mimi So formed a joint venture in 2004, Richemont's first investment in an American brand. In 2007, Richemont requested to become
330-464: A high level of client service, human touch, and brand consistency. Since the early 2010s, many luxury brands have invested in their own boutiques rather than wholesalers like department stores. Three of the world’s biggest luxury conglomerates— LVMH, Kering, and Richemont — significantly increased the share of annual sales captured from their directly operated stores and e-commerce over the past decade. Luxury brands use distinct boutique types to tailor
385-419: A high price. The scarcity of the good can be natural or artificial; however, the general population (i.e., consumers ) must recognize the good as distinguishably better . Possession of such a good usually signifies " superiority " in resources and is usually accompanied by prestige. A Veblen good is a superior good with a prestige value so high that a price decline might lower demand. Veblen's contribution
440-402: A history of tradition, superior quality, and a pampered buying experience. Luxury goods have been transformed by a shift from custom-made ( bespoke ) works with exclusive distribution practices by specialized, quality-minded family-run and small businesses to a mass production of specialty branded goods by profit-focused large corporations and marketers. The trend in modern luxury is simply
495-629: A luxury good to such an extent that sales can go up, rather than down. However, Veblen goods are not synonymous with luxury goods. Although the technical term luxury good is independent of the goods' quality, they are generally considered to be goods at the highest end of the market in terms of quality and price. Many markets have a luxury segment including, for example, luxury versions of automobiles , yachts , wine , bottled water , coffee , tea , foods , watches , clothes , jewelry , cosmetics and high fidelity sound equipment. Luxuries may be services. Hiring full-time or live-in domestic servants
550-612: A newly formed, separately traded holding company, Reinet Investments S.C.A . In 2018, Richemont sold Lancel to the Italian leather goods company Piquadro Group. In October 2024 Richemont agreed to sell Yoox Net-A-Porter to Mytheresa . In October 2014, the first blocking order against trademark-infringing consumer goods was passed against the major British Internet service providers by Richemont, Cartier International and Montblanc to block several domains selling trademark-infringing products. Luxury goods In economics ,
605-399: A product or service that is marketed, packaged, and sold by global corporations that are focused "on growth, visibility, brand awareness, advertising, and, above all, profits." Increasingly, luxury logos are now available to all consumers at a premium price across the world, including online. Global consumer companies, such as Procter & Gamble , are also attracted to the industry due to
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#1733084914889660-519: A special and memorable "luxury feel" for customers. Examples include LVMH , the largest luxury goods producer in the world with over fifty brands (including Louis Vuitton ) and sales of €42.6 billion in 2017, Kering , which made €15.9 billion in revenue for a net income of €2.3 billion in 2019, and Richemont . The luxury brand concept is now so popular that it is used in almost every retail, manufacturing, and service sector. New marketing concepts such as "mass-luxury" or "hyper luxury" further blur
715-680: Is a Swiss luxury watchmaker founded in 1830. It is a subsidiary of the Swiss luxury conglomerate Richemont . Baume & Mercier was founded as "Frères Baume" in 1830 by brothers Louis-Victor and Célestin Baume, who opened the watch dealership in Les Bois , a village in the Swiss Jura . The Swiss watch manufacturer established a branch in London in 1851 under the name "Baume Brothers", which led to expansion throughout
770-452: Is a luxury reflecting income disparities. Some financial services, especially in some brokerage houses, can be considered luxury services by default because persons in lower-income brackets generally do not use them. Luxury goods often have special luxury packaging to differentiate the products from mainstream competitors. Originally, luxury goods were available only to the very wealthy and "aristocratic world of old money" that offered them
825-583: Is credited as one of the first of its kind. In the United States, the development of luxury-oriented department stores not only changed the retail industry, but also ushered the idea of freedom through consumerism , and a new opportunity for middle- and upper-class women. Fashion brands within the luxury goods market tend to be concentrated in exclusive or affluent districts of cities worldwide. These include: Baume et Mercier Baume & Mercier ( French pronunciation: [bɔm ˈe mer-sjej] )
880-464: Is demonstrated by the significance of the Veblen effect, which refers to the phenomenon of people purchasing costly items even when more affordable options that provide similar levels of satisfaction are available. The income elasticity of a superior good is above one by definition because it raises the expenditure share as income rises. A superior good may also be a luxury good that is not purchased below
935-408: Is especially used for medieval manuscripts to distinguish between practical working books for normal use, and fully illuminated manuscripts , that were often bound in treasure bindings with metalwork and jewels. These are often much larger, with less text on each page and many illustrations, and if liturgical texts were originally usually kept on the altar or sacristy rather any library that
990-497: Is much less used for objects from the fine arts , with no function beyond being an artwork: paintings, drawings, and sculpture , even though the disparity in cost between an expensive and cheap work may have been as large. Luxury goods have high income elasticity of demand : as people become wealthier, they will buy proportionately more luxury goods. This also means that should there be a decline in income, its demand will drop more than proportionately. The income elasticity of demand
1045-404: Is not constant with respect to income and may change signs at different income levels. That is to say, a luxury good may become a necessity good or even an inferior good at different income levels. Some luxury products have been claimed to be examples of Veblen goods , with a positive price elasticity of demand : for example, making a perfume more expensive can increase its perceived value as
1100-415: Is not necessarily a product or a price point, but a mindset where core values that are expressed by a brand are directly connected to the producer's dedication and alignment to perceptions of quality with its customers' values and aspirations. Thus, it is these target customers, not the product, that make a luxury brand. Brands considered luxury connect with their customers by communicating that they are at
1155-513: Is the second-largest luxury goods company in the world after LVMH . In 2015, Richemont's Net-a-Porter Group was merged with the YOOX Group in an all-share transaction. In August 2022, Richemont announced the prospective sale of a 47.5% stake in Yoox Net-a-Porter (YNAP) to Farfetch in exchange for Farfetch shares, and the sale of a 3.2% stake to Mohamed Alabbar . In January 2024, Farfetch
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#17330849148891210-538: The British Empire . By the late 19th century, the company had an international reputation, and its timepieces had set accuracy records and won a number of timekeeping competitions. In 1918, company director William Baume partnered with Paul Mercier to found "Baume & Mercier" in Geneva . The firm became specialized in manufacturing wristwatches , particularly models in unconventional shapes. In 1919, Baume & Mercier
1265-539: The JSE . The brands it owns include A. Lange & Söhne , Alaïa , AZ Factory, Baume & Mercier , Buccellati , Cartier , Chloé , Delvaux , Dunhill , IWC Schaffhausen , Jaeger-LeCoultre , Montblanc , Mr Porter, Net-a-Porter , Panerai , Piaget , Peter Millar , Purdey , Roger Dubuis , Serapian, The Outnet, TimeVallée, Vacheron Constantin , Van Cleef & Arpels , Vhernier, Watchfinder & Co. , and Yoox . As of October 2023, Compagnie Financière Richemont S.A.
1320-549: The Latin verb luxor meaning to overextend or strain. From this, the noun luxuria and verb luxurio developed, "indicating immoderate growth, swelling, ... in persons and animals, willful or unruly behavior, disregard for moral restraints, and licensciousness", and the term has had negative connotations for most of its long history. One definition in the OED is a "thing desirable but not necessary". A luxury good can be identified by comparing
1375-546: The microeconomics discipline use the term superior good as an alternative to an inferior good , thus making "superior goods" and "normal goods" synonymous. Where this is done, a product making up an increasing share of spending under income increases is often called an ultra-superior good . Though often verging on the meaningless in modern marketing, "luxury" remains a legitimate and current technical term in art history for objects that are especially highly decorated to very high standards and use expensive materials. The term
1430-428: The "aspiring class" in this context. Because luxury has diffused into the masses, defining the word has become more difficult. Whereas luxury often refers to certain types of products, luxury is not restricted to physical goods; services can also be luxury. Likewise, from the consumer perspective, luxury is an experience defined as "hedonic escapism". "Superior goods" is the gradable antonym of " inferior good ". If
1485-522: The Capeland collection for men, and the Linea and Promesse collections for women. In 2015, Baume & Mercier bolstered its sports watch offerings by entering into a partnership with the celebrated American race carmaker Carroll Shelby International . In 2016 the company sold " Shelby Cobra " models, named for the sports car , in its Capeland and Clifton collections. The short-lived, downmarket Baume brand
1540-481: The Jewellery Maisons. The Specialist Watchmakers group is composed of A. Lange & Söhne , Baume & Mercier , IWC Schaffhausen , Jaeger-LeCoultre , Officine Panerai , Piaget , Roger Dubuis , and Vacheron Constantin . The Other Businesses division includes Alaïa , AZ Factory, Chloé , Delvaux , Dunhill , Montblanc , Peter Millar , Purdey , and Serapian. As of 2023, Compagnie Financière Rupert,
1595-409: The average luxury brand is 5-15% of sales revenue , or about 25% with the inclusion of other communications such as public relations , events, and sponsorships. A rather small group in comparison, the wealthy tend to be extremely influential. Once a brand gets an "endorsement" from members of this group, then the brand can be defined as a true "luxury" brand. An example of different product lines in
1650-405: The church or monastery who owned them may have had. Secular luxury manuscripts were commissioned by the very wealthy and differed in the same ways from cheaper books. "Luxury" and "luxury arts" may be used for other applied arts where both utilitarian and luxury versions of the same types of objects were made. This might cover metalwork, ceramics, glass, arms and armor, and various objects. It
1705-429: The clothing and accessories section grew 11.6 percent between 1996 and 2000, to $ 32.8 billion. The largest ten markets for luxury goods account for 83 percent of overall sales and include Brazil, China, France, Germany, Italy, Japan, Russia, Spain, Switzerland and United Kingdom, and United States. In 2012, China surpassed Japan as the world's largest luxury market. China's luxury consumption accounts for over 25% of
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1760-446: The customers' feeling that they have something special; and (3) endorsement by celebrities, which can make a brand or particular products more appealing for consumers and thus more "luxurious" in their minds. Two additional elements of luxury brands include special packaging and personalization. These differentiating elements distance the brands from the mass market and thus provide them with a unique feeling and user experience as well as
1815-440: The definition of what is a luxury product, a luxury brand, or a luxury company. Lately, luxury brands have extended their reach to young consumers through unconventional luxury brand collaborations in which luxury brands partner with non-luxury brands seemingly at the opposite spectrum of design, image, and value. For example, luxury fashion houses partner with streetwear brands and video games. The sale of luxury goods requires
1870-402: The demand for the good at one point in time against the demand for the good at a different time, at a different income level. When personal income increases, demand for luxury goods increases even more than income does. Conversely, when personal income decreases, demand for luxury goods drops even more than income does. For example, if income rises 1%, and the demand for a product rises 2%, then
1925-430: The difficulty of making a profit in the mass consumer goods market. The customer base for various luxury goods continue to be more culturally diversified, and this presents more unseen challenges and new opportunities to companies in this industry. There are several trends in luxury: The luxury goods market has been on an upward climb for many years. Apart from the setback caused by the 1997 Asian Financial Crisis ,
1980-1006: The experiences of different client groups. Flagship boutiques are grand, multi-story boutiques in major cities that are merchandised with a wide range of collections and staffed by a large team of sales associates. They also offer supplemental services, like jewelry cleaning, hot stamping, on-site service. Many luxury brands use flagship boutiques to illustrate their unique vision or heritage, often through distinctive architecture that transforms them from storefronts to tourist attractions. Large cities often have secondary boutiques in addition to their flagship boutique. Multiple boutiques allow luxury brands to cater to different types of clients, which can differ even within small geographic areas. Secondary boutiques often offer different merchandise than flagship boutiques, and establish different types of relationships with clients. Luxury boutiques in smaller cities are often secondary boutiques as well. The rising popularity of secondary and tertiary cities around
2035-502: The global market. According to the Global Wealth and Lifestyle Report 2020, Hong Kong , Shanghai , Tokyo and Singapore were four of the five most expensive cities for luxury goods in Asia. In 2014, the luxury sector was expected to grow over the following ten years because of 440 million consumers spending a total of 880 billion euros, or $ 1.2 trillion. The advertising expenditure for
2090-438: The industry has performed well, particularly in 2000. That year, the world luxury goods market was worth nearly $ 170 billion and grew 7.9 percent. The United States has been the largest regional market for luxury goods. The largest sector in this category was luxury drinks, including premium whisky , champagne , and cognac . The watches and jewelry section showed the strongest performance, growing in value by 23.3 percent, while
2145-401: The main purpose of displaying wealth or income of their owners. These kinds of goods are the objects of a socio-economic phenomenon called conspicuous consumption and commonly include luxury cars , watches , jewelry , designer clothing , yachts , private jets , corporate helicopters as well as large residences, urban mansions , and country houses . The idea of a luxury brand
2200-552: The majority partner of the joint venture. Mimi So declined and purchased Richemont's stake in the venture. Richemont and Polo Ralph Lauren Corporation formed a 50/50 joint venture called The Polo Ralph Lauren Watch and Jewelry Company, S.A.R.L., in March 2007. The joint venture lasted until 2018. In 2008, Richemont spun off all of its non-luxury goods businesses, principally Richemont's stake in British American Tobacco , into
2255-600: The price of a later model. In the 1970s, Baume & Mercier introduced shaped timepieces such as the Galaxie and Stardust models. In 1973, Baume & Mercier presented the Riviera, one of the world's first steel sports watches. In 1988, the Swiss watchmaker joined the Richemont group. Currently, the brand offers the Clifton, Classima and Hampton collections for both men and women,
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2310-399: The product is a luxury good. This contrasts with necessity goods , or basic goods , for which demand stays the same or decreases only slightly as income decreases. With increasing accessibility to luxury goods, new product categories have been created within the luxury market, called "accessible luxury" or "mass luxury". These are meant specifically for the middle class , sometimes called
2365-410: The proportional consumption increase exceeds the proportional income increase . So, if income increases by 50%, then consumption of a superior good will increase by more than 50% (maybe 51%, maybe 70%). In economics terminology, all goods with an income elasticity of demand greater than zero are "normal", but only the subset having income elasticity of demand > 1 are "superior". Some articles in
2420-412: The quantity of an item demanded increases with income, but not by enough to increase the share of the budget spent on it, then it is only a normal good and is not a superior good. Consumption of all normal goods increases as income increases. For example, if income increases by 50%, then consumption will increase (maybe by only 1%, maybe by 40%, maybe by 70%). A superior good is a normal good for which
2475-741: The resort's high season. These boutiques offer merchandise relevant to the resort where they are located, like a cruise collection in a beach resort or skiwear in a mountain resort. Since the development of mass-market "luxury" brands in the 1800s. Extraordinary places will be the factor of development that can be achieved by enabling the conversion of items from the mass-market to the luxury market. Many innovative technologies are being added to mass-market products and then transformed into luxury items to be placed in department stores. Department stores that sell major luxury brands have opened up in most major cities worldwide. Le Bon Marché in Paris , France
2530-475: The same brand is found in the automotive industry, with "entry-level" cars marketed to younger, less wealthy consumers, and higher-cost models for older and more wealthy consumers. In economics, superior goods or luxury goods make up a larger proportion of consumption as income rises, and therefore are a type of normal goods in consumer theory . Such a good must possess two economic characteristics: it must be scarce , and, along with that, it must have
2585-468: The status of "luxury goods" due to their design, quality, durability, or performance, which are superior to comparable substitutes. Some goods are perceived as luxurious by the public simply because they play the role of status symbols , as such goods tend to signify the purchasing power of those who acquire them. These items, while not necessarily being better (in quality, performance, or appearance) than their less expensive substitutes, are purchased with
2640-498: The top of their class or considered the best in their field. Furthermore, these brands must deliver – in some meaningful way – measurably better performance. What consumers perceive as luxurious brands and products change over the years, but there appear to be three main drivers: (1) a high price, especially when compared to other brands within its segment; (2) limited supply, in that a brand may not need to be expensive, but it arguably should not be easily obtainable and contributing to
2695-402: The world has pushed luxury brands to open secondary boutiques in smaller cities than those that can support a flagship boutique. Luxury brands use seasonal boutiques to follow their well-heeled clientele as they leave major cities for smaller resort towns in the summer and winter. Common throughout Europe, seasonal boutiques have short-term leases, like a pop-up shop, which are open only during
2750-529: Was acquired by Korean e-commerce company Coupang , and delisted , which ended Richemont's planned sale of the YNAP majority stake. In 2018, Jérôme Lambert was named CEO of Richemont Group. The compensation of the Richemont group's executives increased by an average of 14% in 2018. In July 2023, Richemont acquired a 70% stake in Italian shoemaker Gianvito Rossi. As of October 2023, Compagnie Financière Richemont S.A.
2805-541: Was awarded the Geneva Seal , the highest international distinction of the time for watchmaking excellence. During the Roaring Twenties , the brand embraced women's emancipation . In the 1940s, Baume & Mercier launched a number of modern watch collections, most notably the 2 Register Chronograph . Early examples of this model with the double-caseback are rare and highly sought after, often fetching more than double
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#17330849148892860-405: Was later renamed IMR Group S.A. on 31 March 1987 and finally Richemont S.A. on 17 August 1988. The spin-off was completed on 20 September 1988. The luxury goods investments of Rembrandt Group combined with Rothmans International formed the initial group of Richemont subsidiaries. In October 2008, the Group divested all of its remaining interests in the tobacco industry . As of 2014, Richemont
2915-482: Was launched on May 15, 2018. Baume watches were sold exclusively online and assembled in Amsterdam. The brand used Ronda and Miyota movements. With an average selling price of between US$ 2,000 and US$ 7,000, Baume & Mercier watches are in the lower-range luxury watch market. In 2016, Baume & Mercier began to present more affordable offerings under US$ 1,000 with the launch of its "My Classima" models,
2970-699: Was the sixth-largest corporation by market capitalization in the Swiss Market Index . In May 2024, Nicolas Bos, the head of Van Cleef & Arpels was appointed CEO effective June 1 2024, replacing Jérôme Lambert. Jérôme Lambert would stay at Richemont Group as Chief Operating Officer reporting to Bos. In May 2024, Richemont acquired Italian jewellery brand Vhernier for an undisclosed sum. Compagnie Financière Richemont S.A. organizes its business activities into three operating divisions: Jewellery Maisons, Specialist Watchmakers, and Other Businesses. Cartier , Van Cleef & Arpels , and Buccellati constitute
3025-416: Was the sixth-largest corporation by market capitalization in the Swiss Market Index . Johann Rupert founded Compagnie Financière Richemont S.A. when he spun off the international assets of Rembrandt Group Ltd. (now Remgro Limited ), a South Africa -based company founded in the 1940s by his father, Anton Rupert. The division, originally founded on 5 March 1979 as Intercontinental Mining and Resources S.A.,
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