By Lenore Fedow
A white gold and diamond tiara from Richemont-owned brand Buccellati’s high jewelry collection. The luxury conglomerate’s jewelry sales showed resilience compared with other categories in Q1 but still sank 41 percent.
Geneva—Richemont’s first-quarter sales fell by nearly half with double-digit declines across all regions, categories, and distribution channels amid the COVID-19 pandemic.

The luxury titan posted a 47 percent drop year-over-year in quarterly sales at actual and constant exchange rates to just under €2 billion ($2.27 billion) compared with €3.74 billion ($4.27 billion) in 2019.

The decline in sales is the result of “unprecedented levels of disruption,” said Richemont, which led to store closures, a halt in tourism and a dip in consumer sentiment.

Richemont’s online distributors and jewelry maisons both fared better than other categories in the first quarter ended June 30.

Sales in Richemont’s jewelry division, which includes Cartier and Van Cleef & Arpels, were down 41 percent at constant and actual exchange rates, reaching €1.08 billion ($1.24 billion) compared with €1.83 billion ($2.09 billion) a year ago.

The Asia-Pacific region saw a lower rate of decline than other areas, with sales in China up 68 percent over the period, due in part to increased online and in-store spending.

Richemont also credited the increase to the recently opened virtual Cartier flagship store on Tmall Luxury Pavilion, a website operated by Chinese tech giant Alibaba Group.

Milan-based jewelry brand Buccellati recently debuted a new ad campaign paying homage to Italian history, starring aristocrat and journalist Beatrice Borromeo.

Sales in Richemont’s specialist watchmakers division sank 56 percent to €359 million ($409.7 million) compared with €823 million ($939.3 million) in 2019.

The decline was due in part to a “strong reliance” on multi-brand retail partners, limited reach to the Chinese market, and poor online retail penetration, said Richemont.

To help remedy those issues, the division has launched several online initiatives and has participated in the “Watch Show on the Cloud” event to reach the Chinese market.

Breaking it down by region, quarterly sales in the Americas sank 61 percent, attributed to the temporary store and distribution center closures.

Sales in Europe were down 59 percent as a result of public health measures and a drop in local demand, said Richemont. Even as stores gradually reopened, the region lacked its usual international tourism.

Sales in Japan fell 64 percent with most stores closed for the quarter.

In the Middle East and Africa, quarterly sales were down only 38 percent due in part to purchases made in advance of a value-added tax increase in Saudi Arabia.

Asia-Pacific was the “most resilient” region, said Richemont, with sales down 29 percent.

Sales declined across all markets in the region except China, which posted triple-digit online sales growth and “very strong” domestic in-store sales due in part to the decline in overseas purchases.

Retail sales (sales at Richemont-owned and -operated boutiques) were down 43 percent, though increases were seen in China and South Korea, where restrictions began to ease in May.

Wholesale sales fell 65 percent in the quarter.

Online retail sales were more resilient than other sales channels, said Richemont, declining 22 percent year-over-year, mainly due to the temporary closures of the online distributor’s fulfillment centers.

Online sales, including online distributors, accounted for 25 percent of sales, exceeding wholesale sales and up from 17 percent a year ago.

Richemont did not hold an earnings call or provide financial guidance for the year ahead.

As of June 30, distribution centers and most stores have reopened, with exceptions in the Americas and travel-related retail.

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