Things are moving again at the Richemont Group, but this time in the right direction. After a few years of hesitation, with massive shake-ups at the head of most brands of the group and the resignation of Kern, and negative results (especially for the 2015-2017 period), the luxury powerhouse seems to be back on track. Today, two important announcements have been made by Richemont. First, a new CEO has been appointed. Second, at its annual general meeting, the Group reports a massive increase in sales (to be nuanced, though).
The first piece of news to be released by the Richemont Group concerns the appointment of a new CEO, in the name of Mr Jérôme Lambert. Is this really new news? Not entirely, as Lambert has had an extensive career with the group and his new position feels like the natural development of this true child of the Richemont school.
After having led Jaeger-LeCoultre and Montblanc and overseen the Group’s Specialist Watchmakers, Montblanc and the Group’s Fashion and Accessories businesses prior to taking on the role of Group Chief Operating Officer last year, Lambert will now overlook the entire portfolio of brands of Richemont, including jewellery brands and new businesses, such as Yoox-Net-a-Porter or Watchfinder.co.uk (two recent acquisitions).
Lambert will thus control Richemont’s Specialist Watchmakers, Online Distributors and Other Businesses and will be supported by Federico Marchetti (CEO of Yoox-Net-a-Porter), Emmanuel Perrin (head of the Specialist Watchmaker Maisons) and Eric Vallat (Head of Fashion and Accessories Maisons). Lambert will report directly to Johann Rupert, Chairman of Richemont.
The second important announcement concerning the Richemont Group today regards the group’s sales. At the Annual General Meeting, the group reported a massive increase of sales for the five months FYTD (fiscal year to date) ending 31 August 2018 (the group’s fiscal year starts on April 1st). For the period, Richemont shows a 25% increase in sales at constant exchange rates and a 22% increase at actual exchange rates. These impressive results have, however, to be nuanced.
This increase is partially explained by the acquisition of new businesses, including Yoox-Net-a-Porter or Watchfinder.co.uk, which have been consolidated in the Group’s accounts since 1 May 2018 and 1 June 2018, respectively. Excluding these two brands, the Group still reports increased sales of 10% at constant exchange rates and 7% at actual exchange rates.
If we look at sales in details, we can see that some regions perform better than others. Europe is up by 28% (we haven’t seen such a trend for years on the Old Continent), Americas are back on the rise with an impressive 42% increase while Asia Pacific, which has accounted for most of the growth these last months, seems to be a bit slower at +23%. Japan and the Middle East are definitely the slowest regions, with +13% and +4% respectively.
The Richemont Group reports that the double-digit sales growth during the first five months was primarily driven by strong performance by the Jewellery Maisons, with a 14% increase of sales. Specialist Watchmaker Maisons report a moderate growth, at +4% for the period.
The full press release can be read here: www.richemont.com/media-cfr/company-announcements