Billionaire Johann Rupert’s golden child under the microscope

Investors remain positive about the potential of luxury goods company Richemont, despite the current strain on the global luxury market.

The Swiss-based company, which deals in high-end goods such as jewellery and watches, was founded in 1988 by South African businessman and billionaire Johann Rupert.

While the company has seen its share price drop by almost 9% year-to-date, it has been steadily recovering since hitting a low point on 20 March 2026.

As the company prepares to release its results for the 2026 financial year next month, many are expecting to see double-digit growth in areas such as jewellery sales.

The company was recently added to J.P. Morgan’s Positive Catalyst Watch list, with the firm noting that its declining share price has made it attractive to new investors.

Renowned stockbroker David Shapiro appeared on CNBC Africa’s Stock Of The Week series on 17 April to discuss his optimism for Richemont.

“When we spoke about Richemont in the past, we spoke about their specialist watches,” Shapiro said. “That was their main area of business, but what’s happened is that it’s shifted to jewellery.”

According to Shapiro, jewellery now accounts for around 70% of the company’s sales, thanks to the success of luxury Maisons such as Cartier and Van Cleef & Arpels, both of which are owned by Richemont.

He explained that while jewellery sales have increased across the luxury goods market, jewellery prices have only risen moderately, as more people buy for themselves rather than as gifts.

“That has lifted Richemont within catching distance of others such as Hermes and LVMH,” Shapiro said. “It was always the poor sister or down at the bottom, but Richemont has had a tremendous run.”

In comparison to the two companies Shapiro mentioned, Richemont has seen substantially less of a decline in share price since the start of the year and a better recovery over the previous month.

Other investors who expressed confidence in Richemont include Sanlam Private Wealth director Greg Katzenellenbogen, who recently chose the company as his stock pick of the day on BusinessDayTV.

“Richemont’s results in the quarter that ended 2025 were up quite significantly in constant currency terms,” Katzenellenbogen said. “That was a very big win for them.”

A struggling luxury goods market

While investors like Shapiro and Katzenellenbogen express positive sentiment about Richemont’s growth, the company has recently been affected by broader geopolitical tensions, as has the wider luxury goods sector.

The war in the Middle East is placing immense pressure on the sale of luxury goods, as the subsequent global oil crisis has strained logistics companies and reduced discretionary spending.

Significant drops in travel and tourism due to the war factor into this, as the Middle East is one of the fastest-growing regions for the luxury goods market.

Less foot traffic in major regional airports, such as Dubai International Airport, has contributed as many people purchase their luxury goods here while travelling.

Many of the largest luxury goods companies have reported significant share price drops since the start of the war, including Richemont.

In its previous financial results, Richemont said the Middle East and Africa were its fastest-growing regions, with revenue growth of around 20%.

Luxity co-founder Michael Zahariev explained that the Iran war compounded other factors which were already putting pressure on the luxury goods market.

“Many of their traditional markets, such as the US or Europe, had been flattening,” Zahariev said. “China, for a long time, looked like the next frontier, but for the last while it certainly wasn’t turning out that way.”

“To a certain extent, there was hope that the Middle East and Africa could perhaps add to that. So this has really thrown a spanner in the works and created this negative market sentiment.”

However, Zahariev said there may be potential for a strong recovery in the luxury goods market if a resolution to the Middle East conflict is reached.

He explained that a similar situation had occurred towards the end of the Covid-19 pandemic, which had similarly disrupted travel and logistics.

“When we started coming out of that, one of the markets that really thrived was the luxury industry,” Zahariev said.

“So there might be an opportunity there, depending on how things settle. Consumers, especially wealthy consumers who are starved of travel, will need to spend that money somewhere.”