Following the announcement of its yearly results in May 2021, covering the period 2020-2021 (the group closing its books on March 31st), luxury powerhouse Richemont now announces its sales for the first quarter of the year 2021, representing sales over the period April 1st – June 30th. Without surprise, and due to the ease of safety and sanitary measures worldwide, sales are up drastically compared to the same period in 2020, which was right in the middle of the COVID-19 pandemic and global confinement policies. What’s even more reassuring, yet to be taken with some precautions, is the level of sales compared to the same period in 2019 (not affected by COVID-19), as sales for Q1 2021 are exceeding that of the pre-pandemic.
Versus the prior-year period, which was severely affected by the pandemic, all regions, channels and business areas of the Richemont Group saw sales progress at triple-digit rates, with the exception of Asia Pacific (whose growth was already seen in early 2021), Online Distributors and online retail where sales grew by double-digits. Overall, the group reports sales up 129% compared to the same period last year, specifically for the Jewellery Maisons and Specialist Watchmakers with a growth of 142% and 143% respectively – remember that these hard luxury sectors were even more severely impacted than fashion and leather goods. Other business areas of the Group, mostly Fashion & Accessories Maisons, report 124% sales growth.
Looking at the regions, the growth is led by the Americas, with sales increasing by 276% driven by strong local demand. With sales up by “only” 108% Europe remains one of the least performing markets, just slightly higher than Asia Pacific. But as said above, this region was already on an impressive growth trend in the past months.
2021 vs. 2019
Considering the exceptional situation in Q1 2020, which has seen one of the most drastic drops ever in sales for the Group and the entire luxury industry, it feels more relevant to compared Richemont’s sales in Q1 2021 to sales over the same period in 2019, when the world was still living “normally” and wasn’t affected by any sanitary constraints. In this instance, Richemont reports sales up by 22% at constant exchange rates and by 18% at actual exchange rates, thus exceeding pre-pandemic levels in most business areas, channels and regions.
The growth is mostly led by two regions, Asia reporting a 40% increase in sales and The Americas reporting a 47% increase. Even though a slightly smaller market, Middle East and Africa report a +55% growth over the period, compared to sales of Q1 2019. Europe and Japan, on the other hand, remain on negative evolution of sales when comparing 2021 to 2019, reporting -16% and -14% respectively.
Looking at the business areas in detail, we can clearly see that the Jewellery Maisons are the main vector of growth for the group, not only because this business area accounts for more than half of the group’s sales, but also because it is the only area that progresses at a double-digit rate, with sales up by 43%. Specialist Watchmakers report sales up by 6% over the Q1 2021 period compared to 2019.
Overall, Richemont reports solid sales with growth almost everywhere, in most regions, channels and business areas – with a few exceptions when comparing this year’s results to that of 2019. Two comments are however needed. First, considering that the situation isn’t yet fully “normal” and that some countries still face public health protection measures and a halt in tourism, the overall performance of the Group is certainly strong. On the other hand, it might also be seen as a temporary correction of the market and the trend initiated this trimester would have to be confirmed in the following months if the global pandemic doesn’t evolve once again in the wrong direction.
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