Johann Rupert, executive chairman of Compagnie Financière Richemont, said Thursday the company would weather the current storm in financial markets.
“Access to easy money has dried up for some market participants, and I am not sure that we are necessarily over the worst,” he told shareholders at Richemont’s annual meeting in Geneva. Richemont’s portfolio of brands includes Cartier, Van Cleef & Arpels, IWC, Piaget and Chloé.
Regarding the outlook for luxury goods overall, Rupert said: “Richemont is fortunate that the luxury goods business, whilst not immune to external disruption, has historically shown itself to be relatively resilient.
“There are many opportunities for our businesses to grow, both in terms of the expanding number of potential clients in established markets as well as new markets, which are opening up to luxury products. I have every confidence that, whatever may lie ahead in the short term, Richemont will continue to prosper and grow over the long term.”
He added that the company’s cash resources are conservatively invested, and that so far, it has not suffered any financial losses as a result of market conditions. He also said Richemont is seeking to “minimize its exposure” to any major downturns in markets and consumer confidence.
In fact, Rupert said his biggest problem right now is meeting demand, especially in the watchmaking sector. “We are addressing the whole supply question, with plans for further expansion of our watchmaking capacity. That will take some time to deliver, however.”
Rupert also gave a trading update for the new fiscal year’s first five months to Aug. 31. Sales grew by 11 percent, with the strongest growth coming from specialist watchmakers, where overall sales increased by 20 percent.
He also broke out some brand-specific sales rises: Chloé sales rose by 12 percent; Montblanc, by 11 percent, and Cartier and Van Cleef, by 8 percent.
By geographic region, sales in Asia rose by 22 percent; in Europe, by 14 percent, and in the Americas, by 6 percent. Due to the weakness of the yen, sales in Japan fell by 4 percent in euro terms.
The company, which approved a dividend of 1.25 euros, or $1.74, per share before deduction of withholding tax, will release its interim results for the six-month period to Sept. 30 on Nov. 16.
This story first appeared in the September 14, 2007 issue of WWD. Subscribe Today.