Richemont chairman Johann Rupert has urged Richemont’s shareholders to vote against the appointment of luxury veteran and activist Francesco Trapani to the board, citing his history with competitor LVMH Moët Hennessy Louis Vuitton, and describing him as an “inappropriate” candidate.
As reported, the activist investor Bluebell Capital Partners wants to install its cofounder Trapani, formerly chief of Bulgari and of the watch and jewelry division at LVMH, as the representative of the “A” shareholders on the board of Richemont.
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Bluebell’s proposal will be put to a vote at Richemont’s AGM in Geneva on Sept. 7.
In a detailed letter to shareholders, Rupert said that Bluebell has a relatively small stake in Richemont, parent of brands including Cartier, Van Cleef & Arpels, and Dunhill, and lacks the “legitimacy to represent all ‘A’ shareholders on the board.”
Rupert described Trapani as an “inappropriate candidate for election,” adding that he is “not independent, as he has a long history of close relationship with the LVMH group and its main shareholder.”
“LVMH is one of our company’s key competitors. The board may not responsibly recommend to shareholders to let a person who has a long history of 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 our company’s decision-making process,” Rupert said.
Richemont’s chairman reminded shareholders that Trapani was CEO of Bulgari when it agreed to be acquired by LVMH in 2011, and later served as chairman and CEO of LVMH’s Watches and Jewelry division from 2011 through 2014.
Trapani also sat on LVMH’s board of directors from 2011 through 2016 and worked as an advisor to LVMH’s Chairman and CEO Bernard Arnault from 2014 through 2016. Trapani resigned from Tiffany’s board in November 2019, the day after LVMH acquired the U.S. jewelry giant.
Bluebell, which has been lobbying for change across a variety of industries and companies, including Hugo Boss, first tabled its request earlier this month. Trapani is a cofounder of Bluebell, although he no longer has shares, or operational involvement, in the company.
Richemont’s “A” shares are publicly traded, while the “B” shares are held by Rupert and his family. Rupert also has 51 percent of the voting rights and can veto board members’ appointments, even if those candidates are elected by shareholders.
As reported, Richemont is proposing that its shareholders elect Wendy Luhabe, a former Richemont employee and a current member of the board, instead of Trapani.
In Monday’s letter to shareholders, Rupert described Luhabe, who is based in South Africa, as an “ideal” candidate. He cited her extensive business and boardroom experience, as well as her contribution in the areas of diversity, equity and inclusion.
Rupert also noted that, until this year, Richemont’s board did not propose to elect one specific director to represent the holders of its “A” shares. He said Richemont considers that directors “must act in the interest of all shareholders, and not only of one class of them. Swiss law, however, entitles Bluebell to request the appointment of such a representative.”
He said that given the diverse makeup of the “A” shareholders, “neither Bluebell nor Mr Trapani has legitimacy to represent them as a group. For this reason, the board considers that its current independent directors are the best suited to serve as representatives of the ‘A’ shareholders on the board.”