Richemont Group’s Sales Show Slight Improvement for Q3 Ended December 2020
Robust sales in Asia Pacific and the Middle East; a difficult situation in Europe.
Richemont Group, the luxury powerhouse behind Cartier, IWC, Jaeger-LeCoultre, and more, like most conglomerates operating in the luxury industry, has been dramatically impacted by the COVID-19 pandemic with sales down 16% over the first nine months of its current financial year (April-December 2020). Still, the group has released its quarterly report, concerning sales over the last three months of 2020. If the situation remains tense, in a continuously volatile environment, with a varied performance across regions, the overall situation seems to slowly recover, the group reporting sales up by 1% at actual exchange rates and by 5% at constant exchange rates compared to the prior year period.
For the period October-December 2020, Richemont claims that worldwide sales progressed by 5% – EUR 4,186 million vs. EUR 4,156 million over the same period in 2019 – driven by 25% sales growth in Asia Pacific where robust results in China (+80%) more than offset declines in other Asian locations. Middle East and Africa also record two-digit growth over the period. Altogether, this allows the group to show stability over the specific period and to return to the level of sales of 2019, prior to the current situation we now know. However, it is to be noted that sales in Europe contracted by 20%, affected by renewed public health protection measures and a halt in tourism. In the Americas, sales rose by 3%, supported by relatively strong domestic sales.
As expected with the current sanitary situation and temporary store closures, online sales rose by 17% over the period, while a decline is reported in the wholesale channel. Retail sales were particularly strong in China, Taiwan (China), Russia and Saudi Arabia.
Looking at the results of the group, we can see that sales are mostly supported by the strong performance of the Jewellery Maisons (mostly Cartier and Van Cleef & Arpels) reporting a growth of 14% over the period October-December 2020. However, the watchmaking division reports that sales decreased by 4%, with declines in all regions excluding Asia Pacific where sales grew by double digits, partly sustained by the Watches & Wonders event in Sanya, China.
Richemont Group’s results for the current financial year will be announced on Friday, 21 May 2021, which will give a complete view of how the COVID-19 pandemic has been affecting sales of luxury goods. More details www.richemont.com.