There is nothing quite like a well-executed turnaround, especially when a long-term assessment reflects back to a particularly vulnerable starting point.
Luxury brands conglomerate Richemont’s role in polishing up iconic jewellery brand Cartier, which it took control of in 1993, is well known. Perhaps a less familiar success story lies in another of Richemont’s jewellery brands — Van Cleef & Arpels, which the Rupert family-controlled group acquired in 1999 for €300m.
At the time that might not have appeared the most prudent investment. Back then Van Cleef & Arpels turned over €60m and had generated a loss of €60m. Today Van Cleef & Arpels is a powerhouse maison in Richemont’s highly profitable jewellery segment, which, aside from Cartier, includes Buccellati and Vhernier. Richemont chair Johann Rupert says Van Cleef & Arpels is now a €5bn brand that is “killing” its competitors.
Richemont, it seems, has a tougher battle in turning its sprawling soft-luxury segment around, which has been trading in the red for many years.
Another startling turnaround was witnessed this week at gaming group Tsogo Sun, though this is viewed through a short-term lens. Tsogo has been running at the back of the field in the online betting race, where large players such as Hollywood Bets stole a march on the traditional casino businesses.
Tsogo’s latest annual results showed the online betting segment recording a 24% hike in gross gaming revenue net of bonusing to R313m and adjusted ebitda coming in at R50m compared with a loss of R15m in the previous financial year. That’s a snappy turnaround in anyone’s book and presumably means some successful grabs at market share in what appears to still be a vibrant gaming segment.
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