Johann Rupert, wealthy founder of Swiss luxury group Richemont, has said he backs governments introducing “universal basic incomes” for all citizens to cope with economic upheaval. He also announced his son and a former top Google executive would join the company’s board to help it adjust to new technologies.

The chairman of the group behind brands such as Cartier and Montblanc warned changes in industrial processes and the rise of artificial intelligence would leave many people unemployable. “I’m a proponent of universal basic income,” he told journalists on Friday. “We have to give time to people to re-skill themselves for a new economy.”

The idea of governments providing a basic income to all citizens regardless of their work status, health or social contribution has moved in recent years from the radical fringes of economics to the political mainstream, with experiments in countries such as Finland, the Netherlands, Brazil and India.

The introduction of a SFr30,000 a year universal basic income in Switzerland was rejected overwhelmingly in a referendum last year, however.

We have to give time to people to re-skill themselves for a new economy Johann Rupert © Bloomberg

Backers argue a universal basic income could help manage the social disruption caused by rapid technological change, allow people to pursue what they really want to do, and get rid of the complexity of existing benefits systems.

Mr Rupert’s remarks came as Richemont reported a sharp fall in profits in the financial year to the end of March, which prompted a more than 5 per cent fall in the company’s share price. He also said his son, Anton, 29, would join the board, along with Nikesh Arora, the technology investor who worked for a decade at Google.

The South African businessman said his son would act as “a link” between himself as Richemont’s controlling shareholder and management, and help long-term planning, but he sidestepped questions about whether Anton could one day replace him as chairman.

Like other luxury brands, Richemont has seen demand fall sharply in recent years, especially for watches, as a result of sluggish global economic growth, changes in Chinese spending patterns and past overstocking. The Swiss luxury mechanical industry has also had to react to the growth of smartwatches, led by the Apple watch.

His son had told him that smart watches would “not be so bad for proper watches,” Mr Rupert said. Younger consumers had previously stopped wearing watches, using their phones to tell the time. “Now, they are wearing watches for the first time in their lives and then, after a while when they are used to it, they are buying mechanical watches.”

Lex © AFP Richemont: bling it on Luxury watch maker cannot keep increasing dividends on declining sales

Richemont’s operating profits fell 14 per cent to €1.76bn in the year to March. Sales fell 4 per cent to €10.6bn.

Richemont last year bought back and destroyed some products to ease overstocking. Excluding the impact of such steps, sales would have fallen by only 2 per cent at constant exchange rates, it said.

Mr Rupert said he was not yet planning to retire as Richemont’s chairman, despite having overhauled top management in the past year. “They still need a bit of a music conductor,” he said.

Richemont blamed the fall in operating profits partly on one-off charges resulting from measures taken to cut costs and adjust production facilities to lower levels of demand. “Too many watches got into the market,” Mr Rupert complained. “The company is being right-sized to demand.”

Indications from other companies have pointed to a rebound in luxury goods sales this year. Richemont said the second half of its financial year had seen an “improvement overall” in sales, but its chairman refused to offer guidance on the outlook, except that “volatility and uncertainty in the geopolitical and trading environments are likely to prevail”.

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