Table of Contents
Johann Rupert's Richemont is writing off debt to keep Delvaux alive. The Swiss luxury group has converted €100.6 million ($109 million) in loans owed by its Belgian leather goods subsidiary into equity, stabilising a balance sheet that has been weakening since Richemont took over the brand in 2021.
The move is the 2nd major financial intervention at Delvaux since Richemont's acquisition. In October 2022, just over a year after paying €178 million to acquire the brand from Hong Kong's Fung family, Richemont extended a €90 million loan. That debt, now converted to equity alongside subsequent obligations, had grown to €100.6 million. The conversion does not involve a fresh cash outflow from Richemont — it is a restructuring of Delvaux's liabilities into ownership capital, reducing debt on the subsidiary's books and strengthening equity ratios. But it signals plainly that Delvaux's underlying financial position requires active parental management.
What went wrong
Delvaux's difficulties trace back to the same dynamic that has hurt several European luxury brands that expanded aggressively into Asia during the previous decade's growth cycle. The Belgian maison built its modern commercial footprint primarily in China and South Korea, two markets that powered the global luxury boom of the 2010s and that have since become far more complicated.
According to filings reviewed by industry observers, Delvaux recorded a loss of approximately €1.8 million in the financial year running from April 2024 to March 2025 — but that figure was only that modest because of a one-time benefit of nearly €20 million generated by its Hong Kong subsidiary. Strip that non-recurring item out and the annual operating loss was closer to €40 million. The year before, in FY2023, the deficit stood at €26 million. The brand's accumulated losses now sit at nearly €80 million.
The debt that has now been converted into equity was itself a lifeline Richemont had provided to keep Delvaux operating as cash from Asian sales dried up. CEO Jean-Marc Loubier has been working to diversify the brand's market mix, with efforts to deepen its American presence including exhibitions in New York and continued development of its flagship on Fifth Avenue. The brand has boutiques on Bond Street in London, in the Palazzo Reina in Milan and in Paris, alongside a wider network of approximately 50 stores globally.
What Delvaux is
Founded in Brussels in 1829, Delvaux is the world's oldest luxury leather goods house by historical record. It was the first company to file an official patent for a leather handbag in 1908, and has been an official supplier to the Belgian royal court since 1883. Its archive holds over 3,000 patented styles. In the 1930s it was among the first luxury brands to introduce seasonal collections, decades before that became an industry standard.
In the decade under Fung family ownership from 2011, Delvaux grew revenues from roughly €18 million to over €120 million by pushing into China, South Korea and Japan and opening flagship boutiques in the world's most expensive retail locations. That growth made Delvaux an attractive acquisition for Richemont, which has consistently said it wants to build a serious leather goods business to sit alongside its dominant jewellery and watchmaking portfolios.
The Richemont context
Richemont is the world's 2nd largest luxury group by revenue, behind LVMH. Its core strength lies in jewellery — Cartier, Van Cleef & Arpels, Vhernier and Buccellati — and in specialist watchmaking through a portfolio that includes Jaeger-LeCoultre, IWC Schaffhausen, Panerai, Piaget and Vacheron Constantin. Outside those two pillars, its fashion and accessories portfolio has had a more inconsistent track record: it sold Shanghai Tang and Lancel and has repositioned several other soft luxury brands with varying success.
Delvaux sits in that third category alongside Alaïa, Chloé, Montblanc, dunhill and others. Rupert, who chairs Richemont and holds effective control of the group through the Rupert family's B-share structure, has historically spoken about the long-term patience required to build luxury brands. The conversion of Delvaux's debt to equity — rather than a disposal or a sale — suggests that commitment remains intact, even if the brand is not yet generating the returns that would justify its acquisition price.
Richemont's full-year financial results for FY2026 are scheduled for announcement on May 22, 2026. Delvaux's performance will be reported under the group's "Other" business segment.
