Strong Asia growth boosts Richemont’s first-quarter sales
By Nick Hedley - Jul 18th, 13:38
The luxury-goods company reports a 9% year-on-year increase at constant exchange rates.
The Rupert family-controlled Richemont, which owns the Cartier and Van Cleef & Arpels brands, grew sales by 12% in the three months to end-June thanks to strong growth in Asia and rising online sales.
The group, whose R629bn market value makes it the fourth-biggest constituent of the JSE’s top-40 index, said first-quarter sales rose 12% year on year at actual exchange rates, or 9% at constant exchange rates.
Excluding online distributors — the recently acquired Yoox Net-a-Porter (YNAP) and pre-owned watch platform Watchfinder — sales rose 6% at actual exchange rates or 3% at constant exchange rates.
The group said it registered double-digit growth in Japan and the Asia Pacific, “notably in mainland China”.
Together with high single-digit growth in the Americas, this “more than compensated for decreases in Europe and the Middle East and Africa”.
In Europe, sales fell 1% despite “good momentum” in Cartier and Van Cleef & Arpels.
While revenue grew in Asia, Richemont said sales in Hong Kong fell partly because of large-scale protests over a controversial extradition bill and amid calls that leader Carrie Lam resign.
Meanwhile, “unfavourable currency movements and the severance of selected wholesale relationships” meant sales in the Middle East and Africa fell 12%.
The group said it had net cash at the end of June of €2.4bn, versus €2.2bn a year ago.
Analysts at FNB Securities said in a note last week Richemont’s operating margins could come under pressure in the second half because of the integration of lower-margin e-commerce assets, investments in e-commerce and marketing, and the “clean-out of watch inventories in wholesale”.Business Live
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