Compagnie Financière Richemont
Jewelry maisons generate €15.3 billion at 32% margins while watches decline, demonstrating apical dominance during resource scarcity.
Cartier and Van Cleef & Arpels generated €15.3 billion in fiscal 2025—eight times the revenue of Richemont's next-largest division. The jewelry maisons posted 32% operating margins while the specialist watchmaker division contracted 13%, revealing apical dominance in its purest form: when resources become scarce, subordinate branches receive less auxin, less nutrients, less investment. The holding company structure makes the mechanism visible in balance sheets rather than hidden in botanical tissue.
Richemont's €21.4 billion in revenue breaks cleanly into dominant and suppressed growth. Jewelry maisons grew 8% year-over-year while watches declined double digits. Regional performance follows the same pattern: Americas up 16%, Japan up 25%, Europe up 10%—but Asia Pacific down 13% as Chinese domestic demand collapsed. The group doesn't struggle with execution. It demonstrates how apical dominance creates winner-take-all dynamics during environmental stress. When luxury demand contracts, scarce capital flows to proven performers (Cartier's iconic Love bracelet, Van Cleef's Alhambra collection) rather than distributing equally across the portfolio.
The specialist watchmaker brands—Piaget, Baume & Mercier, Vacheron Constantin, IWC Schaffhausen—face structural disadvantage beyond market cycles. Jewelry can be worn daily and restocked across price points; mechanical watches occupy narrower use cases and higher price thresholds. The €3.3 billion watch division competes for investment against jewelry brands generating nearly five times the revenue at higher margins. This isn't poor management. It's resource allocation following evolutionary logic: when the main trunk produces abundant fruit, lateral branches receive maintenance energy but not growth capital.
The 2024 appointment of Nicolas Bos as CEO—previously CEO of Van Cleef & Arpels—signals which direction auxin flows. The holding company now has a leader who built his career in the dominant division, ensuring strategic decisions reflect jewelry economics rather than watch tradition. Richemont's challenge isn't diversification. It's managing the tension between a rational apical dominance strategy (maximize jewelry, stabilize watches) and investor expectations for balanced growth across a multi-brand luxury portfolio.