Following the monthly announcements made by the FHS regarding Swiss watch exports and half-year results by Swatch Group a couple of days ago, it is now time for the other giant of the Swiss watch industry, Compagnie Financière Richemont SA, to announce its first-quarter 2020 results… And, as expected from the current coronavirus situation, lockdown policies and closure of manufactures during the confinement, revenues are dropping massively for Richemont with sales down by almost half compared to the previous year.
Richemont Group starts its fiscal year on April 1st, meaning that the first-quarter 2020 results account for the month of April, May and June 2020 – right in the middle of what is potentially one of the worst sanitary and economical situations ever. As such, it is no surprise to see Richemont reporting sales down by 47%, impacted mostly by the coronavirus pandemic – sales dropped from EUR 3,740 million for the first quarter 2019 to EUR 1,993 million for the first quarter 2020. The Group accounts double-digit sale decline “across all regions, distribution channels and business areas due to widespread temporary store and distribution centre closures, a halt in tourism and subdued consumer sentiment in many markets“.
Looking more closely, we can see that Europe, the Americas and Japan all report an average 60% drop in sales. Decreases were less pronounced in the Middle East and Africa, and in Asia Pacific – the latter benefiting from 47% sales growth in mainland China and delivered triple-digit online sales growth. Without surprises, online businesses – mostly represented by Yoox-Net-A-Porter – showed better resilience than traditional retail, as online sales contributed 8% of Group sales compared to 2% in the prior year period. The decline in sales for online retail is ‘only’ 22%, compared to minus 43% for classic retail.
Also, the most impacted businesses of Richemont are the specialist watchmakers, with a 56% drop in sales. Jewellery Maisons (mostly Cartier and Van Cleef) fared better than the other business areas (-41% sales).
More details and full financial report at www.richemont.com.