Departing Richemont: Perrin to Resign Post As Luxe Group’s CEO

Alain Dominique Perrin will step down as chief executive of Compagnie Financière Richemont SA at the end of the year, citing personal reasons.

The dent in operating profits, it added, would also come from a restructuring charge of $53 million linked to the Dunhill and Lancel brands. In the fiscal year ended March 2002, operating profit was $511 million on sales of $4.09 billion. The company also announced plans to scale back the loss-making Dunhill and Lancel businesses in the U.S.

Analysts welcomed the news of the warning, saying that restructurings were long overdue.

As for the timing of Perrin’s departure, analysts were divided. J.P. Morgan’s Flouquet said she was puzzled by it. "I thought it was quite surprising for a ceo with his sort of experience to leave at the toughest possible moment for the group. It must have been a difficult decision to make."

However, Dana Telsey, senior managing director of Bear, Stearns & Co. in New York, said that changes can often occur during challenging times. "Businesses will always go on to the next phase. Sometimes these changes are a result of a challenging environment. Look at what’s happening at Chanel."

Telsey added that she didn’t view Perrin’s partial exit from the company as a negative. "He’s very well respected and an able business manager and I like the fact that he’s remaining a member of the board. Next month, at the analysts meeting, it will be interesting to see what the company’s plans are going forward," she said.

It’s no secret that Rupert’s ultimate goal is to distance Richemont from the idea of a big conglomerate with a high-powered ceo. Over the next five years, it is likely that he will treat the holding company as a support base for the brands, overseeing distribution, central administration and real estate issues. As a result, the brand management will become more autonomous.

Richemont’s shares on the Swiss stock exchange closed Tuesday at $15.78, up 56 cents, or 3.7 percent from the previous day.
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