After luxury holding group Compagnie Financière Richemontreported that it had appointed investment bank Nomura to advise on the possible sale of leather goods business Lancel, Gary Saage, chief financial officier revealed that the company had decided against the impending sale.
During a newswire call concerning the company’s provisional financial results, Saage stated that Richemont decided not to sell Lancel because they were unable to attain the right price for the label. “If we wanted to sell the fashion businesses, and we don't, that would mean a huge destruction of shareholder value," said Saage, claiming that selling Lancel below the asking price would not benefit Richemont. He added that with the right management in place at Lancel, the company could add value to the label.
“The speculation on Lancel was warranted, I won't deny that. We told employees we were pursuing strategic options," concluded Saage. Richemont recently reported that they were willing to invest in the leather good business, but whether the investment will attract the right buyer or help turn around the loss making company, has yet to be seen.