This story first appeared in the September 15, 2006 issue of WWD. Subscribe Today.
LONDON — The first half of the financial year isn’t even over for Compagnie Financière Richemont SA, but executive chairman Johann Rupert is already upbeat about fiscal 2007.
On Thursday, at the company’s annual shareholders’ meeting in Geneva, Rupert reported that sales were up 16 percent for the five-month period ended Aug. 31.
“The results for the first six-month period will be good, and I am confident for the year as a whole,” said Rupert, adding the solid performance was achieved despite tough comparisons with last year.
His only warning was that the increased strength of the euro against the dollar and the yen would affect the group’s year-end profitability to some degree.
“The effect is likely to be more marked in the second half, depending on the evolution of exchange rates,” he said.
Some 60 percent of Richemont’s sales are outside Europe, although most of the manufacturing takes place in Switzerland and elsewhere in Europe.
On Nov. 17, Richemont plans to announce complete profit and sales figures for the six months ending Sept. 30.
Jewelry houses, and especially Cartier and Van Cleef and Arpels, had sales rise 13 percent, driven by jewelry and watches. Specialist watchmakers’ sales rose 16 percent, with Jaeger-LeCoultre, Piaget and Panerai driving sales.
Sales at Montblanc and Montegrappa, the writing instrument manufacturers, rose 23 percent. The lion’s share of sales came from Montblanc, which has steadily broadened its offering to include watches, leather goods and silver jewelry lines.
Rupert also reported Lancel and Alfred Dunhill, the two leather accessories houses that have been underperforming for years, have begun to turn the corner.
Lancel will break even this year, Rupert said, although losses have increased at Dunhill. However, sales at both houses increased by 10 percent in the five-month period.
Rupert said Dunhill was trading above budget this year, and the business in Europe and Japan was growing. “I am confident that this maison is now moving in the right direction,” he said.
Sales at Chloé, the Paris fashion house, continue to roar ahead, increasing by nearly 90 percent in the April to August period. Rupert said, however, that growth was slowing due to tough comparisons and that the pace for the full year would likely be lower than in the first half.
By region, Asia-Pacific had the biggest sales growth, 20 percent, followed by Europe and the Americas, each with 17 percent. Growth in Japan was 8 percent.