Navigating Tariff Storms: Rémy Cointreau's New Leadership and the Luxury Play for Resilience

The spirits sector is no stranger to turbulence, but Rémy Cointreau now finds itself at a critical crossroads. With tariffs weighing heavily on its financials and geopolitical tensions clouding its future, the company has bet its recovery on Franck Marilly—a veteran of luxury giants like Chanel and Shiseido—to steer it through uncharted waters. The stakes are high: Marilly's ability to pivot the firm's strategy could determine whether Rémy Cointreau emerges as a contrarian opportunity in a beleaguered sector or becomes another casualty of trade wars.

The Tariff Threat and Its Toll

The numbers are stark. Rémy Cointreau's 2024-25 sales fell 18% to €984.6 million, with Cognac—the backbone of its business, accounting for 71% of revenue—plummeting 21.9%. The primary culprit? Tariffs. The company now faces a potential €100 million ($114 million) hit to operating profit in 2026-27 under a worst-case scenario, including punitive duties in China (38.1% anti-dumping tariffs on Cognac) and the U.S. (20% tariffs on EU imports). Even with mitigation measures—such as shifting supply chains or price adjustments—the net impact could still reach €65 million.

Investors have taken notice: shares tumbled 42% over 12 months but rebounded 5% after the company's April 2025 update, signaling cautious optimism. Yet the risks remain immense. China's investigation into EU brandy imports could prolong tariffs, while the U.S. has only paused its duties temporarily. For Marilly, the challenge is twofold: stabilize profitability amid these headwinds and rebuild momentum in key markets like the U.S., where sales are still struggling despite a “technical rebound” in Q1.

Marilly's Luxury Edge: A Catalyst for Resilience?

Marilly's appointment, effective June 25, 2025, marks a strategic shift. His experience at Chanel and Shiseido positions him to reimagine Rémy Cointreau's premium offerings, a move critical as trade barriers force brands to focus on value over volume. Luxury goods, unlike mass-market spirits, often command pricing power and brand loyalty that can offset tariffs. Marilly's track record in global luxury marketing—think Chanel's successful campaigns in China and Shiseido's digital pivot—suggests he could amplify Rémy's premium image through targeted storytelling and experiential marketing.

But tariffs are not the only hurdle. The company's cost-cutting measures—layoffs, reduced eau de vie purchases—signal a focus on cash preservation. Marilly's task is to balance this austerity with growth. His background in Asia-Pacific markets (via his time at Shiseido) could help diversify revenue streams, reducing reliance on the U.S. and China. Meanwhile, his expertise in brand management might drive innovation in limited editions or high-end blends, appealing to ultra-wealthy collectors insulated from economic swings.

Scrapping 2030 Goals: Pragmatism Over Ambition

The withdrawal of Rémy's 2030 sales targets—a bold move—reflects this new realism. The company's earlier growth assumptions, set in 2020, were built on stable trade conditions and strong U.S. demand. Today, those pillars are crumbling. By abandoning rigid targets, Rémy prioritizes agility over predictability, aligning with peers like Pernod Ricard and Diageo, which have also abandoned mid-term forecasts. This shift could attract investors seeking companies that adapt rather than cling to outdated plans.

The Contrarian Case: Risks and Rewards

For investors, Rémy Cointreau presents a compelling—yet perilous—contrarian play. Its shares now trade at a 42% discount to their 2024 highs, and a recovery in U.S. sales (projected for H2 2025) could spark a rebound. Marilly's strategy could also unlock value by:
1. Repositioning Cognac as a premium luxury asset, leveraging its French heritage and rarity.
2. Reducing tariff exposure via alternative supply chains or regional partnerships.
3. Capitalizing on cost discipline, with margins potentially improving if sales stabilize.

However, the risks are acute. Prolonged trade disputes could erode profitability further, and Marilly's vision must overcome entrenched operational and cultural norms at Rémy. The company's reliance on Cognac—a category facing stiff competition from Scotch whisky and tequila—adds another layer of uncertainty.

Investment Takeaways

• Hold for the long term: Rémy's stock could be a diamond in the rough for investors with a 3–5-year horizon, provided Marilly delivers on premiumization and cost control.
• Monitor tariff developments: A resolution to U.S.-China trade tensions or a reduction in China's anti-dumping duties would be major catalysts.
• Consider a staggered entry: Allocate a small position now, with options to add if sales rebound or tariffs ease.
• Beware of sector-wide risks: Spirits stocks are broadly depressed, but Rémy's luxury focus may offer better downside protection than peers reliant on volume-driven markets.

In the end, Rémy Cointreau's fate hinges on whether Marilly can transform its challenges into opportunities—a luxury brand's ultimate test. For investors, the question is whether to bet on the next chapter of French cognac's story or wait for clearer skies.

Data as of June 2025. Past performance does not guarantee future results. Consult with a financial advisor before making investment decisions.