|Montblanc boutique in Hamburg. Photo credit: Anthony DeMarco|
A luxury slowdown in China, a European economy under constant crisis, and sluggish growth in the U.S. has failed to slow the growth in the sale of “hard luxuries” (jewelry and watches). The latest example is Geneva-based Compagnie Financière Richemont, which issued a statement Monday saying that it expects first half profits to rise from 20 percent to 40 percent, year-over-year.
Richemont—whose brands include Cartier, Van Cleef & Arpels, Montblanc and Vacheron Constantin—was required to make this statement prior to its sales and profits reports for the first half of the year. SIX Swiss Exchange requires that issuers make an immediate announcement when “the foreseeable profit or loss for a given period is expected to deviate significantly from the profit or loss achieved in the prior-year period.”
In accordance with these requirements Richemont said that sales for the four months ended in July rose 24 percent on a reported basis and 13 percent on a constant-exchange basis. Based on these results, Richemont’s said its operating profit for the six months ending September 30 is likely to show an increase of between 20 percent and 40 percent compared to the first six months of the last financial year. Net profit for the same period may also increase by 20 percent and 40 percent.
Richemont sales for the five months ending August 31 will be announced on September 5 first-half results for period ending September 30 will be announced November 9.
This is the latest in financial reports that are revealing the resiliency and strength in hard luxuries.
* In late July, Paris-based LVMH reported revenue growth of 26 percent, year-over-year to $16 billion for the first half of 2012. Group profit rose 28 percent to $2 billion. The luxury group, whose jewelry and watch brands include Tag Heuer, Hublot and Bulgari, acquired in June 2011, reported that total jewelry and watch sales rose 113 percent to $1.6 billion, with Bulgari's revenue now included. Organic growth was 13 percent.
* A few days earlier, Swatch Group, the world’s largest watch company, said its watch and jewelry sales for the first half of 2012 increased 16.7 percent to $3.42 billion, year-over-year. The company owns 19 watch and jewelry brands in all market segments, including Swatch, Breguet and Longines.
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