Richemont forgave €100M of Delvaux's debt — the price of a bad Asian bet

Delvaux, founded in Brussels in 1829 and styled as the world's oldest luxury leather goods house, was bought from the Fung family by Richemont in 2021. The brand's modern footprint had been built in Asia — China and South Korea were its core markets — and when Asian luxury demand slowed, there was no self-sustaining business outside the region to absorb the shock.

The financing arc tells the story. In October 2022, barely a year and a half after the acquisition, Richemont extended a €90 million shareholder loan. The loan grew to €100.6 million while Delvaux accumulated losses approaching €80 million. Its financial year from April 2024 to March 2025 showed a net loss of about €1.8 million — a figure flattered by a one-time €20 million benefit from its Hong Kong subsidiary, with the underlying operating loss substantially larger.

On 17 April 2026, following a report by the Belgian daily De Tijd, it emerged that Richemont had converted the full €100.6 million of debt into equity. No fresh cash changed hands: the group simply absorbed the losses onto its own balance sheet, cleaning the subsidiary's ratios. Delvaux sits in Richemont's 'Other' business area, which for the financial year ended March 2026 recorded an operating loss of €96 million on sales of €2.7 billion.

The conversion buys time, not demand. Delvaux still has to rebuild a business that works beyond China and Korea — inside a group whose fashion holdings run on the profits of its jewellers.

Richemont converted the full €100.6M debt to equity, absorbing ~€80M of accumulated losses onto its own balance sheet to clean the subsidiary's ratios.

Buying a brand whose growth was built in Asia meant paying for the Asian luxury boom at the top of the cycle — when China and Korea slowed, there was no home-market cushion

A €90 million loan little more than a year after closing shows the acquisition thesis broke almost immediately; shareholder debt kept the brand alive while deferring the reckoning

Converting debt to equity is the formal accounting of failure: the owner absorbs ~€80 million of accumulated losses rather than let them compound on a leveraged subsidiary

The reported €1.8 million loss for 2024–25 hid the real burn rate behind a one-time €20 million benefit from the Hong Kong subsidiary — the accounts flattered the brand even in crisis

When a brand's growth comes from one region, the acquirer is buying that region's cycle. When the cycle turns, the purchase price is only the first payment — the loans that follow are the real cost.

After the conversion Delvaux runs with a clean balance sheet and the same market problem: rebuilding sales beyond China and Korea, inside a group whose 'Other' business area lost €96 million in FY2026. Richemont has signalled long-term backing for the house — the question left standing is whether a brand that lived on its owner's loans can learn to live on its own margins.