Watch and jewellery sales up 64% at Richemont

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Group enjoys total sales of £3.6bn in six months to September 30.

Luxury goods group Richemont, owner of brands including Cartier, Piaget and Van Cleef & Arpels, has released its consolidated results for H1 with sales increasing a total 29% with a value of €4.2 billion (£3.6bn).

Highlights from the results show solid growth across all sectors of the group, with its operating profit increasing 41%, a profit increase of 10% during the period of £607 million.

The company’s net cash position totalled £2.2 billion, an increase of £611 million compared to the same period in 2010.

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In Europe, sales for the six months to September 30 this year totalled £1.3 billion, up 22% on H1 in 2010. In the Asia-Pacific region sales totalled £1.5 billion, boasting the highest increase of 60% at constant exchange rates compared to 2010’s first half results.

The jewellery houses’ total sales grew 34% to £1.85 million in H1, with Richemont describing Cartier and Van Cleef’s performances as exceptional.

The opening of a number of new boutiques by Richemont jewellery brands is also said to have boosted sales, especially in the Asia-Pacific regions.

Cartier’s watch offerings has been described as “strong” in H1, with the group enjoying a total 30% increase in sales, which it says reflects the demand for haute horlogerie.

Richemont’s total watch sales stood at £1 billion. The company said that “despite higher input costs and the strength of the Swiss France the contribution margin was 27%, reflecting [our] pricing power and leverage”.

Johann Rupert, chairman and chief executive of Richemont expressed pleasure at the “solid performance” of the group’s brands during H1.

“Our maisons were able to benefit from a favourable trading environment to enhance their positions in jewellery, watchmaking and accessories.

“The rate of increase in net profit was lower than the increase in operating profit primarily due to a one-off gain in the comparable period. Richemont’s financial position continues to be strong: the group’s net cash position is € 2.6 billion (£2.2bn).”

Rupert said that sales trends had continued during the period to the end of last month, with sales up 28% in October this year compared to 2010’s figures.

“For the second half of the financial year, we face both the impact of global economic problems on the luxury goods industry in general, and the demanding comparative figures against which group sales will be measured,” said Rupert.

“Notwithstanding these challenges and based on the group’s performance for the year to date, operating profit for the full year is expected to be significantly higher than last year. Moreover, the creativity of our maisons and the responsiveness of our colleagues, our confidence in our business model and the strength of our balance sheet will enable us to continue to invest in our businesses for the long-term, despite the very worrying world economic environment.”
 

 

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