Rémy Cointreau credit rating now ‘negative’
Rémy Cointreau’s credit rating has been downgraded to “negative” by Fitch Ratings following the recent resignation of two key figures at the company.
Fitch Ratings has downgraded Rémy Cointreau’s credit rating to ‘negative’Credit rating agency Fitch claims that following the departure of Rémy Cointreau’s CEO Frédéric Pflanz and Rémy Martin Cognac’s CEO Patrick Piana, the French group’s ability to handle an unstable market in China is now unclear.
It was announced earlier this month that Pflanz would be resigning for “personal reasons” after only three months in the role.
Piana resigned as CEO of Rémy Cointreau’s Cognac arm just 20 days later.
The company, which was previously in possession of a ‘stable’ rating by Fitch, suffered another blow when it revealed an 18.3% global organic sales decline for its Rémy Martin brand in the first nine months of the year, a fall attributed to China’s crackdown on luxury gifting.
A statement by Fitch read: “We are concerned that the departure of key management may impair the company’s effectiveness in coping with the current challenges in cognac and in implementing its plans to strengthen the non-cognac operations.”
The agency predicted that Rémy Cointreau’s operating profit for 2014 could fall between 20% and 25% due to the group’s expansion plans and investment in aged stocks.
However, Fitch also predicted that a stabilization in the high-end spirits market in China for 2015, which would allow Rémy Martin to “bounce back”.
