Richemont Sales Up 9% in Q3

A pickup in European sales, growth in the U.S. and a solid performance at Cartier drove sales at Richemont up 9 percent in the third quarter.

LONDON — A pickup in European sales, growth in the U.S. and a solid performance at Cartier drove sales at Compagnie Financière Richemont up 9 percent in the third quarter ended Dec. 31.

Richemont said in a statement Friday that sales would have risen 13 percent at constant exchange rates, and the combination of the powerful euro and weak dollar stunted growth rates in the quarter. 

The company — whose brands also include Chloé, Piaget, Van Cleef & Arpels, Montblanc and Alfred Dunhill — provided percentage changes only and will release full results on June 9 for the fiscal year ending March 31.

As the quarter and calendar year came to an end, the company’s Cartier unit shined not only in the showroom, but in the courtroom as well. On Dec. 21, U.S. District Court Judge Thomas Griesa awarded Cartier a default judgment against more than 30 named defendants in a counterfeiting case that has stretched over two years. According to the ruling, the defendants failed to respond to the lawsuit and have been ordered to pay Cartier millions in statutory damages and legal fees.

Sales in Europe rose 12 percent, due to the return of tourists and renewed domestic demand. In France, sales increased by 17 percent, and in Italy they rose by 10 percent. Sales of jewelry, watches and writing instruments were particularly strong, the statement said.

In the Americas, sales rose 6 percent, and by 15 percent at constant exchange rates. The statement said the weakness of the dollar dented growth. Richemont’s jewelry houses and Dunhill reported double-digit growth at constant rates.

In Asia-Pacific, sales rose 8 percent, and 16 percent at constant rates. In Japan, sales rose 5 percent, and in China they increased by 49 percent at constant rates.

In general, retail sales worldwide increased by 9 percent, while wholesale sales rose by 8 percent in the quarter.

Watch sales rose 10 percent, jewelry sales rose 7 percent, and writing instrument sales grew 9 percent in the quarter. Leather and accessories sales were flat at actual exchange rates but rose 4 percent at constant rates.

The statement said sales at Cartier and Van Cleef grew 12 percent at constant exchange rates and benefitted from “exceptional sales” of a handful of high-end jewelry pieces. Watches, especially Cartier’s steel Santos Demoiselle and models by Jaeger-LeCoultre and IWC, performed well, the company said. 

This story first appeared in the January 24, 2005 issue of WWD.  Subscribe Today.

With regard to Richemont’s other businesses, which include Chloé, Hackett, Purdey and Old England, sales rose 28 percent. The company said sales at Chloé were particularly strong, thanks to the expansion of the company’s global retail presence.

Analysts across the board said they were impressed with what they called “strong” results. “I think the results proved that the industry trends overall are good, and there is no slowdown,” said Antoine Belge, luxury analyst at HSBC in Paris. “Cartier is definitely making a comeback, and there is plenty of room for future growth from specialist watchmakers like IWC and Jaeger-LeCoultre.”

Jacques-Franck Dossin, analyst at Goldman Sachs, said in his note that the next fiscal year, which begins on April 1, would be a strong one for the group.

Meanwhile, earlier in the week, a Richemont spokesman denied an ongoing rumor that the company has put Hackett, the London-based men’s wear company, up for sale. “We’re not very good at selling brands. It’s not in our nature,” said Alan Grieve, director of corporate communications at Richemont. “We have our reasons for holding on to our brands. It’s not just about ego. Clearly, we believe they have a future.”