LONDON – In a challenging year for the luxury industry, Richemont saw sales climb 4 percent to 21.4 billion euros, fuelled by increased jewelry sales in the fourth quarter and double-digit growth across all regions except for Asia Pacific.
Operating profit at the parent of Cartier, Van Cleef & Arpels and IWC fell 7 percent to 4.47 billion euros, dragged down by the specialist watch brands, which have been hit hard by the slowdown in demand across Asia, and China in particular.
Profit from continuing operations fell 1 percent to 3.76 billiion euros. Richemont posted a loss of 1.01 billion euros from discontinued operations due to Yoox Net-a-Porter, which was sold to Mytheresa earlier this year.
A display from the new Cartier show at the Victoria & Albert Museum in London.
Courtesy of the V&A/Peter Kelleher
Sales in the jewelry division were up 8 percent in the year, and accelerated into the double-digits in the fourth quarter. That surge in sales bolstered Richemont’s overall growth in the final three months by 8 percent.
Richemont chairman Johann Rupert described the year’s performance as robust.
“In a persistently uncertain macroeconomic and geopolitical environment, we maintained our focus on nurturing the maisons’ current and future growth, investing in our distribution network, manufacturing assets and quality craftsmanship,” he said.
He added that overall sales performance accelerated in the second part of the year, with a 10 percent rise in the third quarter followed by an 8 percent uptick in the fourth quarter.
Rupert said that while the specialist watchmakers’ performance “mostly reflected weakness in their largest region [Asia Pacific], the group’s performance was robust overall, driven by remarkable growth at our jewelry maisons and retail, and improved momentum at our ‘other’ activities.”
Richemont’s “other” division, which comprises the fashion brands, the Watchfinder business and the watch components group, saw sales climb 7 percent to 2.79 billion euros. Rupert said that Alaïa delivered strong growth, as did Peter Millar.
Ready-to-wear sales rose in the double-digits, with “an encouraging performance” from Chloé, he said.
He added that “ongoing global uncertainties will continue to require strong agility and discipline,” but Richemont is well prepared for any challenges.
“Our long-term perspective, underpinned by a healthy balance sheet, constitutes a proven formula that has delivered seven-fold sales growth over the past 25 years, and remains central to our strategy,” Rupert said.