Richemont Rumored to Sell Jaeger-LeCoultre Jérôme Lambert Leads CHF 1B Buyout

Recent reports indicate a significant shift in Richemont’s long-term strategy, with the group reportedly considering the sale of Jaeger-LeCoultre (JLC).

The proposed deal involves a management buyout led by Jérôme Lambert, the current Chief Operating Officer of Richemont and CEO of JLC. According to industry insiders and reports from Miss Tweed, Lambert is spearheading a consortium to acquire the "Watchmaker’s Watchmaker" for a sum exceeding CHF 1 billion.

If finalized, this would mark the second major divestment for Richemont’s watch division within a single calendar year; it follows the January sale of Baume & Mercier to the Italian firm Damiani.

The Financial Disparity: Jewellery vs. Horology

The motivation for this potential sale is rooted in the widening performance gap between Richemont’s Jewellery Maisons and its Specialist Watchmakers. While brands like Cartier and Van Cleef & Arpels continue to dominate the luxury sector with high margins, the specialized horology brands are struggling to maintain profitability.

For the fiscal year ending March 2025, the Specialist Watchmakers division, which includes JLC, IWC, and Vacheron Constantin, saw an operating profit collapse of 69%, resulting in a slim 5.3% operating margin. In contrast, the Jewellery Maisons reported an operating margin of 31.9%. From a cold, institutional perspective, Richemont is increasingly viewing its pure-play watch brands as a drag on the group’s overall valuation; consequently, offloading these assets to private management may be the only way to insulate the group's share price from the volatility of the watch market.

Executive Restructuring and the "Exile" of Jérôme Lambert

The internal politics at Richemont suggest this buyout has been in development for some time. In June 2024, Nicolas Bos, the former CEO of Van Cleef & Arpels, was appointed as the Group CEO of Richemont. This move signaled a definitive hierarchy shift: the "Jewellery" side of the business had officially won the internal battle for dominance.

Jérôme Lambert’s transition back to the role of JLC CEO in early 2025, while retaining his COO title, appears less like a dual mandate and more like a tactical exit strategy. Lambert has a long history with JLC, having served as its financial controller in 1996 and CEO from 2002 to 2013; his return to the brand seems to be the final step in preparing the maison for independence.

A Pessimistic Outlook for the Industry

While a management buyout is often framed as a "new chapter" for a brand, the reality for the industry is more sobering. A CHF 1 billion valuation for a brand with an estimated turnover of CHF 524 million suggests a 2x revenue multiple. In the world of high luxury, this is a conservative, if not defensive, valuation.

The specialist watch market is facing a brutal correction after the peaks of 2022 and 2023. As Richemont focuses its capital on the high-growth, high-margin jewellery sector, independent houses like a standalone JLC will face significant headwinds:

• Reduced Scaling Power: Losing the centralized logistics and distribution of the Richemont Group.

• Market Saturation: Navigating a cooling global demand for mechanical watches without the safety net of a multi-billion dollar conglomerate.

• Operational Costs: Maintaining the high technical standards JLC is known for while operating on the thin margins currently plaguing the division.

For the enthusiast and the industry professional, JLC becoming independent might offer a return to "purer" horological roots; however, from a financial standpoint, it suggests that Richemont is simply cutting its losses before the market dips further.