* Cartier head Fornas and deputy Lepeu to be joint CEOs
* Sales growth slows to 7 pct in Oct from 12 pct in H1
* H1 net profit rises to 1.08 bln euros, beats 1.04 bln
* Shares down 1.4 percent
By Silke Koltrowitz
ZURICH, Nov 9 Richemont appointed two
veteran managers as joint chief executives on Friday, to help
founder and controlling shareholder Johann Rupert steer the
luxury goods group through a period of slowing sales growth in
its important Asian markets.
65-year-old Cartier chief Bernard Fornas and 60-year-old
deputy chief executive Richard Lepeu will take over from Rupert
as chief executive in April next year, while Rupert, aged 62,
will remain in his other role as executive chairman.
"This company is far too complex and too big for one
individual to run," said Rupert, who took over as chief
executive two years ago when Norbert Platt bowed out due to ill
The announcement came as the world's second largest luxury
goods group after France's LVMH reported a slowdown in
sales growth to 7 percent at constant exchange rates in October
from 12 percent in its first-half period which ended Sept. 30.
The group made no comment on its trading outlook, saying
only that good growth in Europe supported by Asian tourists is
compensating for slower domestic Asia Pacific sales.
"We still saw growth in all regions in October," Chief
Financial Officer Gary Saage told reporters in a call.
Sales growth in the global luxury market is set to slow
sharply this year, to 5 percent from 13 percent in 2011, as
Chinese and European customers rein in spending, consultancy
Bain & Co and luxury goods trade body Altagamma said last month.
LVMH has seen sales growth slowing this year, and Burberry
and PPR's Gucci have warned of tough trading
in growth market China.
Richemont said overall growth in the Asia-Pacific region,
which accounted for 41 percent of group sales in the first half,
was "normalising" after two exceptional years. Growth in the
region dropped back to 9 percent in the first half from 60
percent in the same period last year.
But Saage said China's change of government this month
should dispel the uncertainty that has been hanging over trading
in the group's third biggest market.
Meanwhile first-half sales in Europe, its second biggest
region behind Asia-Pacific, were up 19 percent. Total group
sales rose 12 percent to 5.1 billion euros.
"Asia Pacific and Americas appear to have declined to mid
single-digit growth rates in September and October, which might
raise eyebrows," Kepler Capital Markets analyst Jon Cox said.
"I think the slowdown is temporary and we certainly aren't
seeing a repeat of 2007-8. Post-elections in the U.S. and China,
I suspect sentiment will improve," he said.
Richemont shares, which have risen 35 percent so far this
year, were down 1.4 percent at 63.40 francs by 1138 GMT,
underperforming a flat Stoxx Europe 600 sector index.
The shares are trading at around 14 times prospective
earnings for its fiscal year ending March 2014, broadly in line
with rival Swatch Group, but at a discount to LVMH at
around 16 times estimated 2013 earnings.
First-half net profits at the maker of Cartier watches and
Montblanc pens soared 52 percent to 1.08 billion euros, helped
by a stable euro-Swiss franc exchange rate and beating the
average forecast of 1.04 billion euros given in a Reuters poll.
The appointment of Fornas and Lepeu as co-CEOs means the
longer term succession plan remains open.
"The new solution is certainly not for 10 years, but rather
for about three years. Until then, the younger managers can show
what they are capable of," said Rene Weber, analyst at Vontobel.
The appointment was foreshadowed by Fornas stepping down as
Cartier's CEO in March to continue in "a senior management role
within the group". Fornas, Lepeu and financial chief Gary Saage
will form a senior executive committee, Richemont said.
"Nothing much changes. This company has always really been
run by a troika," he said. Executive chairman since 2002, Rupert
also wore the two hats of chairman and CEO the following year
to steer the company through a difficult period.
"The joint-CEO role is an exception in the corporate world
and probably a sign that leadership will remain in the hands of
chairman Rupert," analysts at bank Sarasin said in a note.
French-born Bernard Fornas started at Richemont almost
twenty years ago as marketing director of the group's flagship
Cartier brand where he worked closely with Richard Lepeu,
another Frenchman, who was named Cartier CEO in 1995.
Fornas has held the top job at Cartier since 2002,
overseeing the jewellery brand's geographical expansion into new
markets in Asia. He is handing over in January to Van Cleef &
Arpels chief Stanislas de Quercize.
Richemont also on Friday appointed several new members to
its group management committee, among them de Quercize and the
chief executives of its Montblanc, Jaeger-LeCoultre, IWC and