Overall sales figures rise 2% to £4.2bn due to high-jewellery demand.
Swiss luxury goods group Richemont has announced its unaudited consolidated financial results for the six months ended 30 September 2014, citing sales growth of 2% to €5.4bn (£4.2bn) largely due to the “international demand for jewellery," which grew by 10%.
Total sales grew 2% to €5.4bn (£4.2bn) and by 4% at constant exchange rates, with performance varied across regions and product lines.
However, jewellery performed particularly strongly for the Group, with sales up 10% at constant exchange rates. In the month of October, sales increased by 4% at actual exchange rates (3% at constant exchange rates), partly reflecting the level of high jewellery sales in the Asia Pacific region.
Operating profit decreased by 4% to €1.3bn (£1.01bn), reflecting “volatile trading conditions and unfavourable currency movements”, according to Richemont’s financial report.
Gross profit rose 3% to €3.5bn (£2.74bn), compared to €3.4bn (£2.66bn) during the six months ended 30 September 2013. However, the Group’s overall profit for the six month period declined by 23% to €907m (£710.8m), which has been credited to a “mark-to-market charge associated with out well-established hedging programme”.
Solid cash flow from operations remaining steady at €1bn (£783m), but selling and distribution costs rose 7%. Communication expenses soared by 12%, largely due to Biennale des Antiquaires et de la Haute-Joaillerie in Paris.
JEWELLERY MAISON SALES
Jewellery sales at Van Cleef & Arpels and Cartier grew by 1% to €2.68bn (£2.09bn), with operating costs down 1% to €973m (£762), in what has been described by the Group as a “challenging environment”.
The Maisons’ boutique networks reported sales growth, whereas wholesale sales were lower than the comparative period. Overall demand for jewellery was good, but demand for Cartier’s watch collections was weak.
Europe accounted for 39% of overall sales, with growth in the region moderated to 6%, reflecting the strength of the Euro, the cautious sentiment among retail partners and fewer tourists.
Markets in the Middle East and Africa continued to report strong double-digit growth. Sales in the Asia Pacific region accounted for 38% of the Group total, with Hong Kong and mainland China the two largest markets.
The Americas region, which accounted for 16 % of Group sales, continued to report strong domestic demand across all segments and product categories, while in Japan, prudent consumer sentiment and a surge in purchases in March 2014 ahead of a sales tax increase combined to dampen sales in the April to September period, as predicted by Richemont.
RETAIL AND WHOLESALE
Retail sales increased by 4% and now account for 53% of the Group’s overall sales. This is partly due to the addition of 43 internal boutiques (mostly in tourist and high footfall areas) to the Maison’s network, which reached 1,099 stores globally. This increase in also reflected in the continuing positive development of Net-a-Porter.