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Richemont Sales Up 10.1%

A strong pickup in Asia and continued strength in Europe led Richemont's sales to a 10 percent rise to $4.88 billion for the year ended March 31.

PARIS — Highlighting a strong pickup in Asia and continued momentum in its core European market, Compagnie Financière Richemont said sales rose 10.1 percent to 3.72 billion euros, or $4.88 billion, for the fiscal year ended March 31.

Currency conversions were made at average exchange rates for the year between the dollar and the euro. At constant exchange rates, the increase in euros stood at 13 percent. Richemont noted the “positive” sales trend seen in the run-up to Christmas continued during its fourth quarter, albeit at a slightly lower rate due to tough comps.

The unaudited figures were reported Tuesday, ahead of full results to be released on June 9, and suggest a robust environment for Europe’s big luxury players.

LVMH Moët Hennessy Louis Vuitton already reported a 9.8 percent rise in first-quarter sales, and analysts expect a positive message Thursday when PPR reports first-quarter sales. HSBC in Paris, for example, is forecasting a 14 percent organic gain at PPR’s Gucci Group luxury division.

But Richemont’s results were slightly weaker than expected, with the performance in the U.S. and Japan deemed disappointing by Antoine Belge, analyst at HSBC in Paris. He estimated fourth-quarter organic sales grew 6 percent, below his forecast of 8 percent.

Goldman Sachs, however, downplayed the importance of the fourth quarter as it comes after the key holiday season and before the Geneva watch fair.

“We believe the outlook for [fiscal] 2006 remains very strong…on the back of the strong pipeline of new products, particularly at Cartier,” Goldman Sachs analyst Jacques-Franck Dossin wrote in a research note.

Richemont — whose brands also include Van Cleef & Arpels, Montblanc, Piaget, Alfred Dunhill, Chloé and Lancel — said its jewelry houses, watchmakers and writing instrument firms all contributed to double-digit growth last year.

In a statement, the firm cited a 10.2 percent sales gain in Europe for the full year, led by “solid growth” in France and Italy, and developing markets such as Russia and the Middle East.

Detailing other regions, Richemont said Asia-Pacific increased 20.3 percent; the Americas, 7.2 percent, and Japan, 2.7 percent.

By product category, increases totaled 8.2 percent for jewelry, 13.5 percent for watches, 9.8 percent for writing instruments and 2.7 percent for leather goods and accessories.

Closures of Alfred Dunhill boutiques in the U.S. and Europe dented that division’s sales, although they were more than compensated by fast-growing Asia, Richemont said. Lancel’s sales were described as flat with the prior year.

A strong performance by Chloé, the Swiss group’s only fashion house, was reflected in a 31.4 percent rise in sales in its “other businesses” column.

In general, retail sales increased 8 percent to 1.51 billion euros, or $1.98 billion, with wholesale sales advancing 11 percent to 2.21 billion euros, or $2.9 billion.