RICHEMONT ISSUES SECOND PROFIT WARNING IN 6 WEEKS
Byline: James Fallon
LONDON — The ride is getting bumpier for luxury goods.
Compagnie Financiere Richemont AG on Friday said it now expects its operating profits in the six months ended Sept. 30 to be about 20 percent below those of the year-earlier period. The statement represents the second profit warning in six weeks for Richemont, the world’s second-largest luxury goods group after LVMH Moet Hennessy Louis Vuitton.
Johann Rupert, Richemont’s chief executive, warned at the company’s annual meeting on Sept. 13 that lower gross margins and an increase in operating costs would have an adverse impact on profitability. At that time he expected Richemont’s first-half operating profits to be flat year-on-year.
On Friday, Richemont said the events of Sept. 11 had a significant negative impact on the company’s sales. “The positive sales trend seen over the first 10 days of the month was reversed such that, on a like-for-like basis, sales for the month of September as a whole decreased by some 13 percent,” the company said in a statement. The worst-affected market was the U.S., although all other markets except Japan were impacted.
Richemont owns such brands as Cartier, Montblanc, Chloe, Van Cleef & Arpels, Vacheron Constantin, Piaget, Baume & Mercier, Dunhill and Panerai. The company reported net profits of $194.4 million on sales of $1.42 billion for the first half ending Sept. 30, 2000. It had profits of $447.9 million on sales of $3.27 billion in the full year ending March 31.
The Swiss-based firm is the latest to warn of sharply slower sales in the weeks since Sept. 11. Its statement follows similar ones from LVMH and Gucci.