More shakeup for unsettled Remy Cointraeu.
The French alcohol company has today announced a top executive from luxury conglomerate LVMH, Eric Vallat, as the new head of its cognac division, Remy Martin.
Remy is facing uncertainties when it comes the future, as it struggling with falling sales, due to waning demand in China.
Vallat, who has headed Louis Vuitton and Christian Dior Couture Japan, will take the reins from Patrick Piana, who handed in his resignation late week - days after the group saw cognac sales plummet 32 per cent in third-quarter sales.
Piana’s departure was preceded by the shock resignation of group chief executive Frederic Pflanz three weeks ago.
Vallat’s arrival comes not just amid leader upheaval, but also as the company tries to quell the blow that a slowing Chinese economy and a clampdown by the authorities on gift-giving and personal spending is having on its sales.
LVMH also felt the sting of luxury brand fatigue in China, with dwindling growth impacting its third quarter results.
China contributes half of Cognac's operating profits, which makes up around 80 per cent of the Remy's total.
The country’s demand boom brought huge benefit to the company's high-end liquors. For example, its Louis XIII cognac, which sells at €2,500 a bottle.
Remy’s rivals Diageo and Pernod have also been hit by changes in China - companies are now starting to pay the price for reliance on a now fast-augmenting market and lack of diversification.
It remains to be seen whether cognac can return to previously-seen growth rates of more than 20 per cent.
Remy said Vallat would carry on its mission of adding value and upholding the reputation of the Remy Martin and Louis XIII brands.
Shares in Remy are currently down just under one per cent.