Bluebell wants Trapani on Richemont's Board of Directors

“We proposed Francesco Trapani, former Ceo of Bulgari and current Chairman of Florence, for the Board because he is a leader in the luxury sector,” Giuseppe Bivona, partner and co-founder of Bluebell Capital Market, a London-based activist hedge fund, exclusively explained to MFF. “He was part of our team until last year, now he has no connection with us. He is independent. He is a leader of the highest caliber”. The manager, contacted by MFF, preferred not to comment on this. The hedge fund would also like the group to focus on jewelry and watches, while it currently also owns clothing companies such as Azzedine Alaïa, Chloé and the e-commerce Yoox Net-à-Porter. The fund expects this could double the share price in the medium term. The requests will be evaluated by the company and will be discussed on September 7, at the general meeting. Bluebell's co-founder spoke to MFF in response to the statement released by Richemont in recent days (see MFF of July 20), in which the luxury giant reported the fund's requests for major changes to governance.

The Swiss group is divided into two share classes. A-shares account for 90% of the capital and are listed and traded on the Zurich stock exchange. The remaining 10%, B-Shares, are held by the fund headed by Johann Rupert, chairman of Richemont, who owns 51% of the company's voting rights. Bluebell is asking to appoint a representative for A-shares holders and elect them in the board of directors, with the vote regarding only interested shareholders, making it indisputable to others. The fund critics the current state of the luxury group as well. «With a market capitalization of over 50 billion dollars, almost 49 billion euros, Richemont is managed as if it is a master company,» Bivona stated. «There is a huge disproportion between the ones managing the company and the ones bearing the risks». Therefore, Bluebell is not only asking for the election of a share representative, but also to have three of them. Changing the company’s statute would require the approval from the chairman Johann Rupert. According to the fund partner, this vote would put the chairman at a crossroads. «We let him choose whether to accept this reasonable request, accelerating the company’s evolution on governance models in compliance with the market, or vote against it because he does not want shareholders with 90% of economic risk to have more than one representative within the Board». According to Bluebell Capitals, the disproportion reflects on every problem regarding capital allocation and business choices, making the controlling shareholders take «often irrational decisions, having to bear just one small percentage of losses». «A company’s value implies a functioning governance which creates an alignment of all stakeholders’ interests».

The fund played an active role in substituting Hugo Boss ceo Mark Langer in 2020. Before 2019, with the role of advisors along with Jana Partners, the hedge fund’s founders entered Tiffany & Co. putting Francesco Trapani in the board of directors, doubling the share prices in the reference period. New developments are to be expected until September. (All rights reserved)