Richemont reports continuing growth

Luxury group Richemont, which owns companies such as Chloe and Alfred Dunhill, stated sales for the five month period to end-August continued to show good growth overall, albeit at a lower rate than its quarter ending in June. Cumulative sales for the five months across all its business areas grew by 11 per cent at actual rates or 18 per cent at constant exchange rates.

The strongest growth during the period came from Richemont's Jewellery Maisons – Cartier and Van Cleef & Arpels - where combined sales at actual exchange rates increased by 13 per cent over the five-month period. Sales of High Jewellery pieces during the period were particularly strong.

Richemont's leather and accessories businesses were 5 per cent lower at actual exchange rates, reflecting the more difficult trading environment in this area of the market.

In fashion, which includes Chloé as well as certain component manufacturing businesses, reported growth of 24 per cent. This was largely due to the impact of acquisitions during the past year, such as the watch case manufacture Donzé-Baume.

From a geographic perspective Richemont saw good growth in many of oits markets. At actual exchange rates, sales in Europe increased by 17 per cent and in the Asia-Pacific region by 19 per cent. Those increases were partly offset by an 8 per cent decrease in Japan. European sales were particularly strong in France, the U.K. and Switzerland, which benefited from strong tourist traffic from emerging market economies.

Sales in the Americas were at the same level as last year, largely due to exchange rate effects. Underlying sales in local currency terms grew by 14 per cent during the five month period. The American market is beginning to show some signs of a slowdown, which is to be expected given the difficulties that the economy is facing.

The impact of the global financial crisis, the high rates of inflation and high commodity prices on our business is difficult to predict. Products and brands positioned at the entry and mid-market price points in the luxury goods industry are experiencing difficult market conditions today. However, to date, the top end of the luxury market – where Richemont’s Maisons are predominantly positioned – has not been affected. That is not to say that Richemont is immune from a slowdown but we do believe that we are better placed than many to weather difficult times ahead.

For its financial year ended 31 March 2008, Richemont reported an increase in sales of 10 per cent to € 5 302 million. Operating profit amounted to € 1 108 million, an increase of 21 per cent over the prior year.

Richemont owns a portfolio of leading international brands or ‘Maisons’, which are managed independently of one another, recognising their individuality and uniqueness.

Image: Jewellery