VENDOME YEAR SEES 15.2% GROWTH IN OPERATING NET
Byline: James Fallon
LONDON — Compagnie Financiere Richemont AG said its luxury goods businesses bucked the downturn in the Far East, reporting a 15.2 percent increase in operating profits and a 19.3 percent rise in sales for the year ended March 31.
Richemont’s luxury goods businesses are held through the Vendome Luxury Group, which previously was listed on the stock exchanges in London and Geneva, but was taken private again earlier this year by Richemont, based in Switzerland. Vendome’s brands include Cartier, Montblanc, Baume & Mercier, Piaget, Chloe, Alfred Dunhill, Sulka and Lancel.
Operating profits in the latest year came to $385.8 million, up from $334.8 million a year earlier. Sales rose to $2.39 billion from $2 billion. Dollar figures for Vendome’s results are translated from the Swiss franc at current exchange.
Vendome reported sales increases in all its product categories and all its geographical markets.
The growth stemmed partially from an increase in the number of its wholly owned stores, where sales rose 30.2 percent to $895.1 million from $688 million a year earlier. Wholesale sales rose 13.6 percent to $1.5 billion from $1.32 billion.
Geographically, the main growth came in Europe and the Americas, where Vendome reported “strong performances in all product categories by all of the brands represented in the region,” Richemont said. Sales in the Americas rose 25.2 percent to $496.3 million from $363.4 million a year earlier. In Europe, the company benefited from increased advertising spending as well as the publicity generated by Cartier’s 150th anniversary. European sales rose 26.9 percent to $941.9 million from $741.5 million in the prior year.
Far Eastern sales rose 8.7 percent to $875.1 million from $808.3 million. This is lower than the group’s past performances, but Richemont said Japan continued to show “significant growth for the group as a whole, although economic developments in Hong Kong and in the Southeast Asian countries have led to a slowdown of demand in these markets.”
However, Indonesia, Malaysia and Thailand account for only a small proportion of Vendome’s sales, and the difficulties there have had only a minor impact on its performance, Richemont said.
The fastest-growing product categories last year were jewelry, where sales rose 27.7 percent to $448.6 million from $351.3 million; gold and jewelry watches, which increased 25.1 percent to $589.6 million from $471.2 million, and other watches, up 28.3 percent to $438.3 million from $341.6 million.
Leather goods sales rose 16.1 percent to $229 million from $197.3 million the year before, and sales of men’s wear rose 5.7 percent to $131 million from $123.9 million. Other products, including women’s wear, rose 5.6 percent to $321.5 million from $304.3 million.
Overall, Richemont, which also has interests in tobacco and pay television, reported a 15.9 percent increase in after-tax profits to $1.18 billion on a 2 percent decline in sales to $7.79 billion for the year ended March 31.
Earnings per share rose 27.4 percent to $112.39 from $88.20. Dollar figures for Richemont’s overall results are translated from the English pound at current exchange.