Jewelry Demand Propels Richemont to Growth

Posted by sallys on May 26th, 2016

RAPAPORT... Richemont’s jewelry sales in the past fiscal year jumped after strong demand outweighed a decline in appetite for watches.

Revenue from the Geneva-based luxury group’s jewelry “maisons” jumped 7 percent to .79 billion (EUR 6.05 billion) in the fiscal year that ended March 31.

The maisons – Cartier, Van Cleef & Arpels and Giampiero Bodino – saw “good” demand for their jewelry collections but watches were negatively affected by a challenging environment in Asia Pacific and the Americas. The overall growth offset the impact of a number of flagship store closures for renovation.

Separately, revenue from the group’s specialist watchmakers, which include Baume & Mercier and Roger Dubuis, rose 3 percent to .62 billion. Sentiment in Hong Kong, Macau and the Americas was negative, while a strong Swiss franc affected the cost of goods sold, Richemont said.

Group-wide revenue advanced 6 percent to .43 billion driven by growth in jewelry, leather goods and clothing. Demand grew in Europe, the Middle East, the Americas and Japan.

The company enjoyed “double-digit” growth in the first half of the fiscal year but the second half saw a decline. Concerns over geopolitical risks and the impact on clients’ behavior proved justified, the company said.

Profit for the year soared 67 percent mainly because of a non-cash post-tax gain related to the merger of the NET-A-PORTER and YOOX groups in October and the non-recurrence of losses largely due to the revaluation of the Swiss franc in the prior year.

April sales slumped 18 percent with revenue in all regions declining.

“In the near term, we are doubtful that any meaningful improvement in the trading environment is to be expected,” the company said.