SWITZERLAND. In big breaking news, Richemont Luxury Group has taken a stake of just over 5% stake in the world’s leading travel retailer Dufry (for subsequent analyst reaction and news on the Dufry share price, click here).

Under Swiss Stock Exchange (SIX) regulations, any holding of more than 3.0% must be publicly disclosed with 24 hours. Richemont Luxury Group is the direct shareholder while the beneficial owner/persons that can exercise the voting rights at their own discretion is Compagnie Financiere Rupert of Geneva, Switzerland.

Stakeholding “makes sense”
Richemont’s purchase makes sense, as the luxury goods maker needs more avenues to sell watches at a moment when many ailing retailers hold oversize inventories, Luca Solca, an analyst at Exane BNP Paribas, wrote in a note cited by Bloomberg.

Richemont has picked up 2,693,856 rights and voting rights, respectively and precisely 5.000001 % as a percentage of voting rights.

A spokesperson for Richemont confirmed to The Moodie Davitt Report that the move had been made to enable Richemont’s Maisons’ access to good locations. This was done in the context of anticipated increased travelling with the second machine age.

Dufry confirmed that it had been informed of the move “as part of its long-standing business relationship” with Richemont but added no further comment.

The surprise news comes hot on the heels of the disclosure that HNA Group of China was acquiring 16.79% of Dufry. That transaction has not yet closed.

We will bring you further news as it comes to hand.

Richemont owns several of the world’s leading luxury goods companies, with particular strengths in jewellery, luxury watches and premium accessories.

The Group’s luxury interests encompass several of the most prestigious names in the sector, including Cartier, Van Cleef & Arpels, Piaget, Vacheron Constantin, Jaeger-LeCoultre, IWC Schaffhausen, Panerai and Montblanc.

Richemont’s arch luxury goods rival LVMH is the majority shareholder in Dufry sector peer, DFS Group. Co-Founder Robert Miller remains DFS’s co-owner.

Richemont has faced some strong headwinds over the past 12 months; Click table to enlarge

In the year ended 31 March 2017, Richemont posted a -4% decrease in sales, which it said reflected a  growth in retail sales offset by a decline in wholesale business. Operating profit fell -14%.

The second half of the year, though, saw an improvement. The USA, Richemont’s largest market, resumed growth while Mainland China, now the Group’s second largest market, enjoyed strong growth along with South Korea, the UK and Macau.