By Samantha Conti
with contributions from Sandra Salibian
 on November 10, 2017
Net-a-Porter x Cartier

LONDON — There’s no looking back.

With high-end watch sales recovering after a difficult few years — marked by stagnating demand and inventory buybacks — Compagnie Financière Richemont is looking at distribution through a new lens, seeing its own retail and online as a big part of the future. But wholesale will still play its part in the show.

On Friday, the luxury giant and parent of Cartier, Van Cleef & Arpels, Dunhill and Lancel reported bumper first-half sales and profits, due to easier comparatives from the corresponding period last year, a generally improved macro environment and favorable exchange rate movements.

Profits rose 80 percent to 974 million euros in the six months ended Sept. 30, while sales climbed 10 percent to 5.61 billion euros. 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.

Sales in Asia-Pacific were up 23 percent, with Mainland China, the largest market in the region, notching double-digit growth, along with Hong Kong, Korea and Macau. The jewelry division rose 15 percent to 3.16 billion euros, fueled by double-digit growth at Cartier and Van Cleef & Arpels.

The interim growth came on the heels of a tough fiscal 2016-17: Richemont was forced to buy back its watches from wholesale clients, make layoffs and restructure its operations to adjust to the new normal of a more measured demand for watches.

Richemont clearly sees a new reality in the watch business and is rapidly adjusting its approach.

In the first half, sales of watches at the jewelry and accessories brands, such as Cartier, Van Cleef & Arpels and Montblanc, were up 14 percent on a net basis and ahead 15 percent at constant exchange rates, while the company’s specialist watch division saw sales climb 6 percent to 1.53 billion euros.

The company also said on Friday that Emmanuel Perrin, who is currently international sales director of Cartier, would become head of specialist watchmakers distribution, a newly created role that applies to stand-alone brands such as IWC Schaffhausen, Officine Panerai and Piaget.

Richemont chairman Johann Rupert said he tapped Perrin because the latter had already been successful in developing partnerships between the Cartier and Van Cleef brands and wholesale partners.

“A prime area of focus will be matching supply with end-customer demand,” said Rupert, who also named Jérôme Lambert to the newly created role of chief operating officer. Rupert said both appointments “will continue our transformation of the specialist watchmakers’ business models to meet the demands of today’s environment.”

In that vein, Richemont is taking a close look at e-commerce, wholly owned retail stores and new wholesale opportunities.

During a conference call early Friday, Richemont’s chief financial officer Burkhart Grund said e-commerce had disrupted the business model for watches and that among the trends Richemont was seeing was customers’ agnosticism about the channels through which they purchased their watches. “Wholesale, retail, e-commerce. It doesn’t matter anymore,” he said.

Richemont also had a front-row seat to its own e-commerce spectacle: Earlier this year, the company worked with Net-a-porter, which it part-owns via the publicly listed Yoox Net-a-porter Group, on the launch of the updated Panthère de Cartier collection that saw a 140,000 euro gold watch sold off the site.

The once e-commerce-shy Richemont has also begun selling other watch brands both on Net-a-porter and Mr Porter. Both sites carry Piaget and IWC, while Mr Porter also sells Baume & Mercier, Montblanc and Officine Panerai.

Last year, The Watch Gallery became the first omni-channel retailer to sell Cartier watches online (previously they’d only been sold online through That site continues to sell Cartier as well as Baume & Mercier, IWC, Jaeger-LeCoultre, Montblanc and other Richemont brands.

Grund said the company plans to continue building up its own e-commerce and brick-and-mortar stores for watches, which makes sense. Watch sales via Richemont’s own channels were nosing double-digit growth in the first half, Grund confirmed.

In the short-term, he said, the big challenge remains with Richemont’s traditional wholesale partners whose inventories are “higher than we’d like to see them. We have to continue to manage the sell-in to sell-out ratio,” he said.

Watches were not the only focus in the first half: Grund confirmed that Richemont had upped its original 5 percent stake in travel retailer Dufry to 7.5 percent, although there are currently no plans to increase it further.

He said Richemont principals have already sat down with the Dufry team to set out a three-year development plan that will focus on selling Richemont accessories and small leather goods. The luxury giant has a similar partnership with DFS for some of its hard luxury brands.

In a bid to enrich its leather goods manufacturing, Richemont also confirmed the purchase of Serapian, the historic, high-end Milanese accessories brand and leather goods manufacturer that was founded in 1945.

Although Richemont declined to comment further, it’s understood the luxury giant will be taking advantage of the factories to scale up its leather goods production.

In an interview in Milan, Serapian’s new marketing director Maxime Bohé said the acquisition was finalized over the summer. Serapian has an atelier in Milan and a factory in Varese. It operates flagships in Milan, Venice, Rome, Los Angeles and Doha.

Bohé said going forward, Serapian’s distribution will remain limited and that the company would continue to produce for other labels.

“We will not change this strategy, as it’s also a way for us to protect our craft,” Bohé said.