LONDON – Compagnie Financière Richemont is building up top management with the creation of two new roles, chief operating officer and head of specialist watchmakers, as the company reported an extraordinary uptick in sales and profits in the first half, with Cartier and Van Cleef & Arpels showing strong growth and sales in Asia-Pacific climbing 23 percent.
Richemont had issued a positive warning last month, letting markets know that sales and profits would be significantly higher than expected, due chiefly to the non-recurrence of exceptional inventory buybacks, improved trading and favorable currency changes.
On Friday, the parent of brands including Cartier, Van Cleef & Arpels, and Dunhill confirmed that profits rose 80 percent to 974 million euros in the six months to Sept. 30, while sales climbed 10 percent to 5.61 billion euros.
Despite the gains, Richemont’s shares were down 4 percent to 86.65 Swiss francs in late-morning trading on Friday.
Sales were fueled by a strong performance at Cartier and Van Cleef, and a return to growth at Dunhill and Lancel. Sales were up 12 percent at constant rates and increased 8 percent excluding the impact of the watch buybacks from the corresponding period last year.
Fiscal 2016-’17 had been a tough one for Richemont, which was forced to buy back stock, make layoffs and restructure its operations to adjust to the new normal of a more measured demand for watches.
Now, however, the tide appears to be turning on a macro and company level, according to chairman Johann Rupert. “The positive sales and profit performance achieved by Richemont in the first half of this financial year highlights the generally improved macro environment. The group also benefited from easier comparative figures and favorable movements in period-end exchange rates,” he said.
In a separate statement, Richemont said that Jérôme Lambert has been appointed to the newly created role of chief operating officer, and will be responsible for all of Richemont’s maisons other than Cartier and Van Cleef & Arpels.
Richemont said he would continue to be responsible for the Richemont regional support platforms and central support services, excluding finance, human resources and technology.
Emmanuel Perrin, currently international sales director of Cartier, will be appointed head of specialist watchmakers’ distribution, another new role. He will be responsible for the coordination of all specialist watchmakers’ distribution strategies. Perrin will join the senior executive committee, effective immediately.
Rupert said the changes “will continue our transformation of the specialist watchmakers’ business models to meet the demands of today’s environment. Mr Perrin, in his twenty-five years with the group, has been successful with Van Cleef & Arpels and, most recently, Cartier, in developing partnerships with our wholesale partners. A prime area of focus will be matching supply with end customer demand.”
The markets had been waiting for a high-profile appointment in Richemont’s watch division after the departure of Georges Kern, who left for Breitling in July. He is their chief executive officer and a shareholder.
Kern had been head of Richemont’s watch operations, having spent 15 years as IWC ceo before being promoted to the new position last November during a difficult period for the high-end watch business overall.