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Wednesday, September 8, 2010

Richemont Jewelry Sales Up 32%, Watches Up 40%; U.S. Sales Up 52%

Richemont headquarters

Swiss luxury goods group Compagnie Financiere Richemont SA said Wednesday that sales for the five-month period, ended August 31, increased 37 percent in actual exchange rates, over the same period a year ago. All segments of the company and all regions saw strong growth, which reflects in part, low comparative figures reported in the prior-year period and recent acquisitions.

Richemont released its financial results for the period before its annual general meeting Wednesday, held at its headquarters in Geneva.

The company saw double-digit growth in all its brands, which it calls “Maisons.” Watch sales—which include Jaeger-LeCoultre, Piaget, IWC, Baume & Mercier, Vacheron Constantin, Officine Panerai, A. Lange & Söhne and Roger Dubuis—reported a year-over-year 40 percent increase at actual exchange rates. When currency fluctuations are included the growth is 30 percent. Jewelry sales—which include Cartier and Van Cleef & Arpels—rose 32 percent at actual exchange rates and 21 percent at constant exchange rates.

Its writing instrument brand, Maison Montblanc, grew 28 percent at actual exchange rates and 20 percent at constant exchange rates. Meanwhile, its division listed as “Other,”—which include Alfred Dunhill, Lancel, NET-A-PORTER and Chloé—saw an increase of 62 percent in actual exchange rates (51 percent constant). This is at least partly due to the company’s recent acquisition of the shopping Web site, NET-A-PORTER.

By region, the Americas saw a 52 percent increase (38 percent actual), largely because of very weak comparative figures for the prior fiscal year.

The Asia-Pacific region, which includes the Middle East (51 percent constant, 36 percent actual), is the company’s most important region accounting for 41 percent of overall sales. In Europe, the sales increase of 27 percent at constant exchange rates and 23 percent in actual rates, fall to 15 percent at constant rates when new business is excluded from the figure. Meanwhile, results in Japan, (22 percent constant, 4 percent actual) were boosted due to favorable exchange rates.

In total, its retail division grew 47 percent (34 percent constant). Excluding the acquisition of NET-A-PORTER, retail sales increased by 24 percent at constant exchange rates.

Its wholesale business, which suffered in particular during the comparative period due to de-stocking by business partners in some markets, saw an increase of 30 percent (21 percent constant) for the period.

“The improved trading environment is certainly welcomed. However, it is far too soon to draw any conclusions about the sustainability of the economic recovery or whether the recession is truly behind us,” said Johann Rupert, Richemont executive chairman and CEO. “This time last year we were still seeing falling sales. This year, with double digit sales growth already in hand, Richemont will report significantly higher first half profit. However, the rest of the year is less straightforward. In the second half of last year, we saw some recovery in sales, setting higher comparative figures against which sales in the six months from October to March will be measured. Relative to the present conditions, those comparative figures were achieved with a weaker euro against the dollar and yen. Compared to the second half of last year, the current strength of the Swiss franc will be negative for the cost of sales.”

In addition to the brand’s mentioned, Richemont’s portfolio includes a Ralph Lauren Watch and Jewelry joint venture and other smaller Maisons and watch component manufacturing activities for third parties.


  1. a 52 % percent in the America region how is that best explained? Have the luxury brands finally gotten over their China obsession, and does the American region promise sustainability in growth given if the luxury brands are serious about tapping into the ignored before American suburban wealth

  2. Hi Jzee,

    Thanks for your question. The company’s explanation is that the numbers are being compared with horribly poor numbers in the prior year. Probably a comparison with 2008 numbers would have been more accurate. Richemont said it expect much slower comparison growth figures in the second half of the year.

    Luxury companies are still going after the China market in a big way with no end in sight. As far as US suburban wealth, luxury companies were really targeting aspirational consumers but according to the surveys I’ve seen, these are the folks that were the hardest hit and will be the people who will be the slowest to return to the same financial situation. I hope the reports are wrong.