Compagnie Financiere Richemont (Richemont), a Swiss-based luxury goods holding business led by South Africa’s richest man Johann Rupert, has ceased commercial operations in Russia as President Vladimir Putin’s military action in Ukraine continues for the second week in a row.
Richemont, a major luxury goods firm created by Rupert in 1988, owns Baume & Mercier, Buccellati, Cartier, Chloe, Jaeger-LeCoultre, Montblanc, Piaget, Peter Millar, Roger Dubuis, Van Cleef & Arpels, and several other premium brands.
It controls a dozen directly run stores in Russia as part of its broadbased business, most of which are in Moscow.
The decision to close down the stores and discontinue commercial activity in Russia comes roughly two weeks after the luxury goods conglomerate suspended operations in Ukraine following an aggressive invasion of the nation by Russian military personnel.
Richemont stated that, in addition to suspending commercial operations in the country, it will make a “substantial donation” to Doctors Without Borders.
Russia was the 17th largest market in the world for Swiss watches last year, seeing $282 million in exports with a retail value of more than $500 million. The country also accounts for over $9 billion in yearly luxury sales, which translates to around 14 percent of U.S. expenditure on luxury products.
Experts believe Richemont’s financial performance during the current fiscal year will suffer as a result of the suspension of its Russian activities, and that this will have an impact on the group’s valuation as investors sell down their stakes to reduce their exposure to the luxury goods maker.
Richemont shares are down more than 15 percent since the Russia-Ukraine conflict began over two weeks ago, with investors losing billions of dollars as market participants sell shares in the business.
Rupert’s net worth has dropped by more than $1.8 billion this year as a result of the recent decline in the value of his luxury goods assets.
His net worth has dropped from $11.9 billion at the start of the year to $10.1 billion at the time of writing.
