Richemont sales edge up, but fashion struggles while jewellery surges
Richemont’s third quarter — the all-important three months to the end of December — saw sales rising only 1%, although at constant exchange rates (CER) they were up a healthier 5% year-on-year, despite the “continuously volatile environment”.
As with other luxury peers (such as Burberry, which also reported on Wednesday), the performance varied widely by region.
It saw “robust sales in Asia Pacific and the Middle East and Africa, both with double-digit growth at actual exchange rates”. This “more than offset” single-digit declines in the Americas and Japan and “a marked contraction in Europe”.
A double-digit increase in its online retail sales and single-digit rise in retail sales were able to compensate for lower wholesale sales at actual exchange rates.
Many consumers may have been unable to go out and socialise, but that didn’t stop them buying ultra-expensive jewellery and the company saw a strong performance from its Jewellery Maisons, while it reported “broadly stable or lower performances” from the other business areas at actual exchange rates.
Digging deeper into those headline statements, total sales reached €4.186 billion. The jewellery maisons’ sales rose 9% (or 14% CER) to €2.366 billion. Specialist watchmakers were down 7% (-4% CER) to €758 million, while its online distributors such as Yoox and Net-A-Porter saw flat sales on a reported basis (+4% CER) to €668 million. Its ‘other’ category (that includes its fashion ops such as Chloé, Dunhill and Alaïa) had a bad quarter with a 16% drop (-13% CER) to €436 million.
Looking at the regional performances, the quarter “was characterised by a varied performance across regions” due to interrupted tourist flows and store closures.
But the overall sales rise was driven by 25% sales growth in Asia Pacific where “robust results” in mainland China (+80%) and Taiwan (+29%) “more than offset declines in other Asian locations”.
Sales in Europe fell 20% due to the low level of tourism and shuttered stores, while in the Americas, sales rose by 3%, “supported by relatively strong domestic sales”. The impressive 27% sales increase in the Middle East and Africa “reflected good performance across channels, resumed tourist spending in Dubai and solid domestic spending, notably in Saudi Arabia”. Sales in Japan rose by 1%, “benefiting from resilient local demand before public health measures were reinstated in major population centres”.
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