Swiss luxury company Richemont is scrapping away the role of Chief Executive Officer starting from next year when its current CEO Richard Lepeu retires in March 2017. The firm that owns Cartier, Montblanc and more than a dozen other high-end brands is also planning to retire eight directors on the board.
The company's founder and chairman Johann Rupert will stay and may consolidate his power. "Rupert is getting back into the saddle and will run it himself, while delegating heavily in terms of operations and brands," Jon Cox, head of European consumer equities at Kepler Cheuvreux, was quoted as saying by the Wall Street Journal.
Under the new management rejig, heads of individual brands will be reporting directly to the board. "I think it's going to make it a lot easier. One individual cannot be held responsible," Rupert said during a recent conference call.
News of eliminating the top post comes after the company reported a 51 percent dive in net profit during the first-half of the present financial year. The company declared profit of $599 million while sales fell 13 percent to Euro 5.1 billion.
The Geneva-based company employs about 30,000 people. It also owns brands such as Chloe and Van Cleef & Arpels. Luxury companies, especially in Europe are currently "struggling" to maintain sales levels. In Europe, tourism has taken a hit following terrorist attacks and Brexit.
Investors "welcomed" the move. Shares of the luxury goods maker were reportedly up nine percent following the news, the telegraph reported. "Everything is changing and we want to stay ahead of that curve," Rupert added.