First half sales rise 29%, but CEO warns of tough global headwinds.
Richemont’s chief executive has highlighted challenging trading conditions in the current global economic uncertainty, but reported a solid performance for the first half of the year.
In his introduction to the company’s 2011 interim report, Richemont CEO and executive chairman Johann Rupert pointed to “the very worrying world economic environment.”
“It is extraordinarily difficult to predict what’s going to happen. Europe and the UK will be in a mess for a considerable period of time,” Mr Rupert warned.
His remarks suggest the second half of 2011 are considerably more challenging than the first half, which saw sales increase by 29% to €4.21 billion and profit increase by 10% to €709 million compared to the same period in 2010.
Jewellery Maisons, including Cartier and Van Cleef and Arpels were the star performers for Richemont with sales up 34 percent to €2.2 billion. Their boutique networks reported even higher growth thanks to new store openings, primarily in the Asia-Pacific region.
Specialist Watchmakers sales increased 30% to €1.2 billion, but margins were squeezed slightly due to higher costs and the strength of the Swiss franc.
Montblanc sales were up by 10% to €334m on the back of strong trading in Asia-Pacific for its watches and accessories.
Fashion and Fashion Accessories, along with the recently acquired Net-a-Porter, which collectively come under ‘other business’ for Richemont grew sales by 25% to €544 million. Alfred Dunhill and Chloe were singled out as strong contributors, and Net-a-Porter’s sales performance was described as well above the group’s average.
Regional growth across the world remained patchy. Japan grew just 9% while sales in the rest of Asia Pacific soared by 60%. Europe posted solid 22% top line growth, although this includes the Middle East, and the company admitted that tourists shopping in Europe remain an important sales driver.