Echoing its rivals in the luxury goods industry – including LVMH, Kering or Swatch Group – Swiss luxury powerhouse Richemont just announced growth for the year ending 31 March 2018. Sales increased by 3% at actual rates and by 8% at constant rates to EUR 10,979 million. The group reports strong performance in its retail network. Operating profit grew 5% and the proposed dividend will be CHF 1.90 (a 6% increase compared to previous period).
Richemont’s results confirm the positive trend of the watchmaking and jewellery markets. Swiss watchmakers have seen business improving over the past months after a prolonged downturn (the 2015-2016 crisis had a negative impact on most watchmaking brands). Swatch Group sales increased 5.8% in 2017; LVMH Watches & Jewelry division sales were up 10%. Swiss watch exports increased 2.7% in 2017 and 10.1% over the first quarter of 2018.
Concerning the different regions, Asia Pacific (China, Hong Kong, Korea and Macau) has a huge impact on these positive figures, with a 17% rise in sales. This region, which accounts for 40% of the group’s sales, remains one of the largest threats too, knowing its volatility. Americas and Japan are also recovering with an increase in sales of +8% and +6% respectively. Finally, Europe, which accounted for 27% of overall sales, is the only region to show declining sales (-2%). Sales in Europe are impacted by the relative strength of the euro and inventory buy-backs in the fourth quarter of the year.
The past months have been particularly busy. Richemont addressed challenges by taking significant measures including a wide management reshuffle. Among key changes, in November 2017, Jérôme Lambert was appointed Chief Operating Officer. Emmanuel Perrin was named Head of Specialist Watchmakers Distribution.
A few days ago, the luxury conglomerate took control of Yoox Net-a-Porter to ramp up its internet retail strategy in the frame of an offer to increase its stake launched in January. Richemont also announced the launch of a new brand, Baume, offering lower-priced trendy, customisable, eco-responsible watches to be sold online only.
To access the press release, please visit www.richemont.com.