Compagnie Financière Richemont SA — which a year ago watched its sales and profits plummet due to SARS, the war in Iraq and flagging consumer confidence — is building on recent momentum with a 158 percent spike in profits to 173 million euros, or $225 million, from 67 million euros, or $87 million, in the first half ended Sept. 30.
All figures are converted from the euro at current exchange.
“The speed of recovery has been surprising,” Alan Grieve, director of corporate communications at Richemont, said Thursday. “Of course, we were coming off weak comparisons with the first half last year, but the numbers are still looking good.”
Grieve added: “Cartier is back — substantially back — with new products, and the watch brands we bought in 2000, IWC, Lange & Sohne and Jaeger-LeCoultre, are penetrating new markets, including the U.S. and Japan.”
The gloom and doom of last year’s first half appears to be all but over for the group, which also counts Montblanc, Dunhill and Chloé among its luxury portfolio. Cartier generates the lion’s share of the business.
Sales in the period rose 14 percent to 1.74 billion euros, or $2.26 billion, from 1.53 billion euros, or $2 billion, with growth across all product categories and regions. Troubled businesses Dunhill and Lancel, although still not profitable, are both on the road to recovery through better products and more focused marketing, Grieve said, adding he expects Lancel in particular to be profitable within 18 months.
Meanwhile, sales in the second half, which began in October, have so far grown at a rate of 8 percent. Grieve said it was reasonable to anticipate “high-single-digit growth” during the rest of the six-month period. He added the group also was expecting a strong, pre-Christmas season.
Sales in the Asia-Pacific rose 30 percent to 360 million euros, or $468 million, from 276 million euros, or $359 million, while sales in Japan rose 7 percent to 300 million euros, or $390 million, from 281 million euros, or $365 million. Grieve said the firm was focused on entry-level products and gifts in order to further stimulate sales in Japan.
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