LONDON — First-half sales and profits soared at Compagnie Financière Richemont as the company brought digital businesses Yoox Net-a-porter Group and Watchfinder into the mix, and saw its longstanding businesses grow, too.
In the six months to Sept. 30, sales were up 21 percent at actual rates to 6.81 billion euros. Excluding YNAP and Watchfinder, sales in the six months grew by 6 percent at actual exchange rates and by 8 percent at constant exchange rates.
Richemont said the underlying growth was primarily driven by strong performance of the jewelry division and double-digit increases in the brands’ directly operated boutiques and online stores.
It said that robust retail sales in jewelry and watches more than offset a 2 percent decline in wholesale sales, which was mainly due to the specialist watchmakers’ ongoing inventory management and upgrade of the wholesale distribution network.
All regions, with the exception of the Middle East and Africa, saw higher sales, with double-digit increases in Hong Kong, Korea, and the U.S.
Profit for the period rose 131 percent to 2.25 billion euros, primarily due to a post-tax, non-cash gain of 1.38 billion euros following the revaluation of Richemont’s existing YNAP shares after it acquired 100 percent of the e-commerce site earlier this year.
Richemont’s appetite for digital businesses is growing, and in the second half, it sealed a strategic partnership between YNAP and Alibaba Group.
As reported, the joint venture is aimed at bringing the in-season offerings of YNAP to Chinese consumers, when they are in China or abroad.
“This new chapter in the history of Richemont reflects the potential we see in China and the confidence we have in Alibaba with whom we share an ambition to set new standards for the future of luxury online, for the benefit of YNAP’s brand partners and customers as well as our Maisons and their clients,” said Richemont’s chairman Johann Rupert.