LONDON — First-half profits at Compagnie Financière Richemont SA — parent of Cartier, Dunhill and Chloé — jumped 10.1 percent to 709 million euros, or $1.01 billion, on the back of strong sales gains worldwide, and in China in particular.
The company said sales ended Sept. 30 rose 29.3 percent to 4.21 billion euros, or $5.98 billion, with double-digit growth in all product categories and all geographic regions, except for Japan. Dollar figures have been converted from euros at average exchange rates for the six-month period.
Sales rose even as Richemont raised its retail and wholesale prices, to compensate for currency fluctuations such as the growing strength of the Swiss franc. The majority of Richemont’s manufacturing is done in Switzerland. “Volatility, we now believe, is a daily part of our lives,” said Gary Saage, chief financial officer of Richemont, during a results presentation broadcast Friday.
Sales in the Asia-Pacific region, which is primarily driven by Mainland China, showed the most robust growth in the period, advancing 48 percent. The company said Mainland China is now Richemont’s third-largest market after Hong Kong and the U.S. During a conference call Friday, Saage noted that of the 43 new stores Richemont opened during the first half, most were opened in Asia. “Generally, we still believe that retail should be expanded in the growth markets and not so much in the West,” said Saage.
Sales in the Americas climbed 23 percent, driven primarily by high jewelry turnover and a generally strong market, Richemont said. Saage said retail purchases by domestic tourists traveling within the U.S. impacted positively on sales in the region, with sales of Van Cleef & Arpels jewelry performing particularly well.
Sales in Europe were up 20 percent, with growth driven mainly by those traveling in the region and the growth of Net-a-Porter, while growth in Japan increased by 8 percent. Saage said in these two territories, growth was “broad based” across Richemont’s categories.
Of Richemont’s products, sales at its jewelry division — which comprises Van Cleef & Arpels and Cartier — grew 34 percent to 2.17 billion euros, or $3.08 billion, driven by demand for high jewelry and more accessible pieces. Sales at the company’s specialist watch division, which includes houses such as Panerai, IWC and Piaget, grew 30 percent in the six months to 1.17 billion euros, or $1.66 billion, while Richemont’s other businesses, which include Net-a-Porter, Lancel and Chloé, rose 25 percent to 544 million euros, or $772 million. Richemont said sales growth at Net-a-Porter was “well above the group’s average,” but noted that the retailer had incurred a loss of 22 million euros, or $31 million, during the half as a result of amortization of intangible assets and costs associated with the expansion of its platforms in the U.K. and the U.S. Overall, the fashion and accessories businesses generated profits of 23 million euros, or $32 million, with Alfred Dunhill and Chloé performing particularly well.
Operating profit for the six months rose 41.1 percent to 1.08 billion euros, or $1.53 billion. Richemont said operating profit growth was higher than net profit growth in the period due to the nonrecurrence of an extraordinary item in the corresponding period last year.
Johann Rupert, Richemont’s executive chairman and chief executive officer, said the strong sales trends in the six months continued through October: Sales in the month were 28 percent higher than in October 2010, with good momentum in the retail and wholesale channels. But in light of current economic conditions, Rupert sounded a note of caution for the rest of the fiscal year.
“For the second half of the financial year, we face both the impact of global economic problems on the luxury goods industry in general, and the demanding comparative figures against which group sales will be measured,” Rupert stated.
He added, however, that operating profit for the full year is expected to be “significantly” higher than last year. “Our confidence in our business model and the strength of our balance sheet will enable us to continue to invest for the long term, despite the very worrying world economic environment,” Rupert added.
Richemont’s shares finished up 1.3 percent at 48.7 Swiss Francs, or $54.30 a share Friday.
EXCLUSIVE: Two and half months after John Targon, cofounder and codesigner of Baja East, was hired as creative director of the contemporary division at Marc Jacobs, he has left the company, WWD has learned. Marc Jacobs International, which is owned by LVMH Moët Hennessy Louis Vuitton, confirmed Targon’s departure in a statement: “John Targon is a talented designer and we appreciate the work he has done here. Ultimately working together did not make sense for the brand and we wish him the best.” Read the story by @jessiredale, link in bio. #wwdnews
@theluxurycollection is officially launching a collection, tapping Sofia Sanchez de Betak for the capsule. Over 30 styles will be featured in the Chufy x The Luxury Collection, debuting next month at Bergdorf Goodman, The Webster, FiveStory and more. De Betak, known as “@chufy,” drew inspiration for the collection from her trips to Japan in the past year #wwdfashion
@lhd, founder and CEO of @thewebster, has teamed up with @lebonmarcherivegauche for the European launch of her ready-to-wear line, LHD. The launch will come with an exclusive pop-up opening today that’s set to run through May 20. Located on the second floor, it carries her debut Miami-themed resort collection, launched in November as see-now-buy-now. #wwdfashion
@longchamp, which marks its 70th anniversary this year, just opened its biggest U.S. store on Manhattan’s Fifth Avenue. On the lower level there’s a floor-to-ceiling display of the brand’s iconic Le Pliage bag – in all of its different colors, shapes and sizes. Customers can also have their product personalized in-store by imprinting names, initials or emblems. #wwdfashion (📷: @ericmtownsend)
“Whenever I’m in that place of sound and music, I don’t have fear or nervousness…This album has a lot of themes of courage and boldness and I want to be the soundtrack for people’s lives. I’ll be so happy if [my songs] evoke strength in people, which I know music has done for me,” says @kimbramusic of her newest album “Primal Heart.” The New Zealand-born singer sat down with WWD to talk about her music, newest tour and connecting with hear fans — read more on WWD.com #wwdeye (📷: @jilliansollazzo)
Luxury handbag resale company @rebagofficial is planning to sell a rare collectible for $70,000: the @hermes White Crocodile Himalayan Birkin. The exclusive Birkin sold for about $100,000 in 2008, when @davidbeckham bought one for his wife @victoriabeckham to add to her collection. Read more about the rare Birkin on WWD.com #wwdaccessories
With her costume pearl necklace and what-you-see-is-what-you-get style, Barbara Bush, who died Tuesday at age 92, was a straight-shooter from start to finish.
Born Barbara Pierce in New York City, Bush served as the 37th first lady, as well as the country’s second lady from 1981 to 1989. In addition to being part of the longest presidential marriage — 73 years — Bush also had the unlikely distinction of having one son, George W., become the 43rd president and another son, Jeb, run unsuccessfully in 2016. Having served as second lady during the Reagan administration’s two terms and lived all over the world during her own husband’s ascending political career, Barbara Bush made it clear that literacy — not fashion — was her priority. Read more from Rosemary Feitelberg’s obituary on the late First Lady in WWD.com, link in bio. #barbarabush #wwdnews
Western and ’90s trends have influenced denim for fall 2018. Think raw, dark and coated jeans mixed with bold prints and tough leather. #trendtuesdays #wwdfashion (Styled by @thealexbadia;📷: @ryanplett)