Richemont says demand is strong for jewelry, watches
November 08, 2013
Geneva--Sales for the six-month period ended Sept. 30 rose for Richemont due to international demand for its jewelry and high-end watch brands, which include names such as Cartier and Jaeger-LeCoultre.
The Geneva-based luxury goods conglomerate reported Friday that total sales reached $7.12 billion, up from $6.83 billion in the prior-year period, a 4 percent increase (9 percent at constant exchange rates).
Gross margin declined from 64.8 percent to 63.9 percent. Profit increased 10 percent from $1.44 billion to $1.59 billion.
In publishing its six-month report Friday, Richemont stated that it wouldn’t be selling any of its brands, despite earlier reports that the company was looking to offload “soft luxury” brands Lancel, Net-a-Porter and Chloé to focus on “hard luxury,” including jewelry and watches.
In the period, jewelry sales grew 2 percent in a “subdued environment” while operating margins increased to 36.9 percent. Sales of watches were up 9 percent while operating margins declined from 32.2 percent to 31.7 percent.
“Further investment in the Maisons will be made, as in the past, to assure their long-term prosperity. No disposals are under consideration at this time or for the foreseeable future. The company will not comment further on this subject,” Chairman Yves-André Istel said in a statement. Istel is the company’s acting chairman while Johann Rupert is on a year-long sabbatical.
On a regional basis, the Americas outperformed other regions, with sales rising 12 percent year-over-year during the period (17 percent at constant exchange rates), primarily due to the sustained momentum of jewelry sales. The acquisition of North Carolina-based clothing company Peter Millar in October 2012 also contributed to the growth.
Sales in Europe/the Middle East were up 8 percent, Asia-Pacific sales rose 1 percent and sales in Japan declined 8 percent.
Richemont owns the Cartier and Van Cleef & Arpels jewelry brands as well as watch brands A. Lange and Söhne, Baume and Mercier, IWC, Jaeger-LeCoultre, Officine Panerai, Piaget, Ralph Lauren Watches, Roger Dubuis and Vacheron Constantin.