SWITZERLAND. Luxury goods company Richemont has posted a +46% increase in operating profit to €1.7 billion in the six months ended 30 September 2017.
Sales for the period grew by +10% (current exchange rates) to €5.6 billion.
The company registered growth in all segments, regions and distribution channels.
Jewellery and watches were the top-performing categories, while the UK, Mainland China and South Korea led the country performance.
“The positive sales and profit performance achieved by Richemont in the first half of this financial year highlights the generally improved macro environment” – Richemont Chairman Johann Rupert
Retail sales recorded strong growth of +13%, driven by watches and jewellery. All regions showed higher retail sales, with Asia Pacific, Japan and the Americas posting double-digit growth.
The Group’s wholesale business, including sales to franchise partners, increased by +11%, with all major product categories showing growth.
Richemont Chairman Johann Rupert said: “The positive sales and profit performance achieved by Richemont in the first half of this financial year highlights the generally improved macro environment. The Group also benefited from easier comparative figures and favourable movements in period-end exchange rates.
“In the period under review, Richemont disclosed that it had taken a stake in Dufry, a leading travel retail specialist listed on the Swiss Stock Exchange, reflecting our view that travel retail spending will increase over time.”
Europe accounted for 29% of overall sales in the six-month period. Sales in the region grew by +3%, partly impacted by the increasing strength of the Euro. The region saw double-digit growth in the UK, moderate gains in most major markets and stable sales in France.
Sales in Asia Pacific accounted for 39% of Group sales, with Mainland China being the largest regional market. Sales increased by +25% with double-digit growth in most markets led by Mainland China, Hong Kong, Korea and Macau. All product categories registered increases.
Sales in the Americas grew by +10%, with strong performances from Cartier, Van Cleef & Arpels, Piaget and Peter Millar. The reopening of the Cartier flagship store in New York in September 2016 and the opening of the Van Cleef & Arpels Design District store in Miami in March 2017 had a positive impact, said Richemont.
The +7% growth in sales was driven by higher domestic and tourist spending, which benefited from a weaker Yen. Jewellery and watches led sales growth, partly supported by the reopening of the Cartier flagship store and new Piaget and Van Cleef & Arpels flagship stores, all in Ginza.
Middle East and Africa
Richemont said that the good performance in watches and writing instruments was partly offset by weak sales in other product categories. Overall, sales increased by +3%, affected by geopolitical uncertainties in the region.
The +15% rise in sales at the Jewellery Maisons included double-digit growth at Cartier and Van Cleef & Arpels. All regions recorded improvements. The higher sales were supported by the non-recurrence of the prior year period’s watch inventory buy-backs at Cartier, Richemont noted.
Specialist Watchmakers’ sales increased by +6% with improvements in both the retail and wholesale channels. Performance varied among the Maisons and the regions, led by good growth in Asia Pacific.
Other (including Montblanc, fashion & accessories and watch component manufacturing activities)
The modest growth was driven by Asia Pacific and Europe. Most Maisons showed an increase in sales, with Alfred Dunhill and Lancel returning to growth, said Richemont.