Net-a-Porter x Cartier

LONDON – In a difficult year for Compagnie Financière Richemont, parent of brands including Cartier, IWC and Van Cleef & Arpels, profits slid 45.6 percent to 1.21 billion euros, or $1.33 billion, as sales fell in the single digits.

In the year to March 31, sales were down 3.9 percent to 10.65 billion euros, or $11.72 billion, as the company struggled with a difficult watch market and endeavored to fine-tune distribution and the store network. As reported, the second half showed signs of improvement, with a rebound in Mainland China and the U.S.

The company said that growth in jewelry, leather goods and writing instruments partly mitigated weak wholesale sales in the 12-month period. Cartier watches and specialist high-end watches were impacted by exceptional buy-backs and capacity-adjustment measures. Montblanc, Chloé and Peter Millar reported good progress, the company said.

Dollar figures have been calculated at average exchange rates for the period to which they refer.

Richemont shares dropped 5.2 percent to 81.45 Swiss francs, or $80.79, following the announcement, while financial analysts called the slowdown in fourth-quarter sales growth disappointing.

Richemont had already been bracing for a profit fall due partly to a one-off gain in the previous fiscal year, related to the merger of Net-a-porter Group to form Yoox Net-a-porter Group, which is now listed on the Milan bourse. Stripping out the impact of the tough comparative, Richemont said profit would have been down 24 percent.

Johann Rupert, the company’s chairman and shareholder of reference, said there was improvement in the second half, and the company was working to become more efficient against a challenging backdrop.

“Volatility and uncertainty in the geopolitical and trading environments are likely to prevail. Our attention is focused on transitioning the group to adjust to operating in a more sustainable growth environment, by adapting our product offer, communication and distribution to new consumption patterns while allocating resources primarily towards research and innovation, digital marketing, online sales platforms and training in all of our maisons,” he said.

Richemont also announced a new program to buy back up to 10 million A shares through the market over the next three years, representing 1.7 percent of the capital and 1.0 percent of the voting rights of Compagnie Financière Richemont SA.

The three-year share buy-back program announced on May 15, 2014, ended on May 12. Under that program, the company repurchased a total of 5,185,000 A shares, representing 0.9 percent of the capital and 0.5 percent of the voting rights of the company.