By Lenore Fedow
A 1926 Art Deco Cartier desk clock featuring a circular burgauté lacquer dial inset with cabochon moonstones, mother-of-pearl, enamel, cabochon turquoises and rose-cut diamonds. The Richemont-owned brand was resilient in a rocky first half of the fiscal year.
Geneva—Richemont’s first-half sales fell by double digits amid the COVID-19 pandemic, but its jewelry brands were resilient.

The luxury titan posted a 26 percent drop year-over-year in half-year sales at actual exchange rates to €5.48 billion ($6.49 billion) compared with €7.39 billion ($8.78 billion) in 2019.

Sales in Richemont’s jewelry division, which includes Cartier and Van Cleef & Arpels, were down 18 percent, reaching €3.06 billion ($3.63 billion) compared with €3.74 billion ($4.43 billion) a year ago.

“This business area [jewelry] was the first to rebound upon emerging from the lockdowns driven by strong presence in China, and a well-developed online offer and enduring appeal of the iconic collections,” said Chief Financial Officer Burkhart Grund during an earnings call.

The company held virtual events, like high jewelry previews and watchmaking presentations, in lieu of its planned physical events to promote the category.

Online sales of its jewelry brands increased by triple digits, said Sophie Cagnard, group corporate communications director.

The classic collections from Cartier and Van Cleef were the top sellers in the first half of the year.

Cartier added a white gold option to Clash de Cartier and a slimmer model of the diamond version of its popular Juste Un Clou bracelet, while Van Cleef & Arpels added to its Perlée and Frivole collections.

Cartier’s Santos and new Maillon de Cartier watch collections did well.

Though Richemont is tightening its belt, it is making strategic investments in store renovations, including the Van Cleef store in Paris’ Place Vendôme, the Cartier boutique in Shanghai’s Plaza 66, and a relocated Buccellati store on London’s Albemarle Street.
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Sales in Richemont’s specialist watchmakers division sank 38 percent to €966 million ($1.15 billion) compared with €1.57 billion ($1.86 billion) in 2019.

In addition to the effects of the COVID-19 pandemic, the decline in the segment was due in part to a “strong reliance” on multi-brand retail partners, said Richemont.

Sales were down by more than half in the first quarter, but improved to a decline of 18 percent in the second quarter, bolstered by a strong performance in China.

Richemont highlighted “notable performances” from Vacheron Constantin with the new Egérie and blue dial Overseas, IWC Schaffhausen’s new editions to the Portugieser collection, and Jaeger-LeCoultre’s relaunched Master Control collection.

IWC Schaffhausen, Jaeger-LeCoultre, Panerai, Piaget and Vacheron Constantin joined Cartier on the Tmall Luxury Pavilion.

Investments in its watch division include the renovated IWC Zurich Bahnhofstrasse store and the new Piaget store in Galeries Lafayette, Paris.

Breaking it down by region, quarterly sales in the Americas sank 33 percent at actual exchange rates, attributed to the temporary store and distribution center closures.

All U.S. channels, including online retail sales, recorded a low-single-digit decline in sales, said Richemont.

All other markets posted lower sales for the first half of the year except China, where sales climbed 83 percent.

Richemont recently inked a deal with Alibaba and Farfetch to further boost growth in the Chinese market.

Retail sales (sales at Richemont-owned and -operated boutiques) were down 23 percent to €2.93 billion ($3.48 billion) in the first six months compared with €3.81 billion ($4.52 billion) a year ago.

Wholesale sales fell 42 percent in the first half.

Online retail sales were more resilient than other sales channels, said Richemont, declining only 3 percent year-over-year despite the temporary closure of fulfillment centers in the first quarter.

Overall online sales, including online distributors, accounted for 22 percent of sales, up from 17 percent a year ago.

Richemont did not provide financial guidance for the year ahead.

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