Luxury is in the detail – Asief Mohamed on Rupert’s Richemont
Aeon Investment Management’s chief investment officer Asief Mohamed comments on Johann Rupert-controlled luxury goods maker Richemont, after the behemoth added around R100bn in market value on Friday. The share price rally, which came off the back of superb half-results, can also be attributed to corporate action in its online sales platform; the company is in talks with e-commerce platform Farfetch. On top of this, an activist asset manager called Third Point, led by Daniel Loeb, has bought around 3% of the business and will be looking to iron out the operational issues plaguing one of the world’s largest luxury goods businesses. Whether Johann Rupert, who is the controlling shareholder via higher voting shares, will agree with Loeb’s direction is unknown at this point. Mohamed outlines some of the reasons for Richemont’s ‘expensive’ valuation, given its cheap cost of capital and rand hedge qualities.