LONDON — The increasingly powerful euro dented Richemont’s third-quarter revenues, which slid 4 percent at current exchange rates in the period ending Dec. 31.
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However, the company said in a statement Thursday that at constant exchange rates, sales would have grown 4 percent, powered by a strong demand in the Asia-Pacific region and the Americas.
“We are pleased with our performance in the quarter,” a company spokesman said. “December was a very good month, but we can’t say yet whether this is going to be a trend.”
Andrew Gowen, equities analyst at Lehman Brothers in London, said, “We’re seeing a quarter-on-quarter improvement, so the trend is good, and there are material changes going on at the company.” He cited new product launches and the growth of the watch business as positive factors in the period.
Richemont did not provide detailed figures for profits or sales in the statement. The company expects to issue its preliminary results for fiscal year 2003-04 in June.
At constant exchange rates, growth in Asia-Pacific was 20 percent while growth in the Americas was 18 percent. But those gains were essentially wiped out by the strong euro. At actual exchange rates, Asia-Pacific grew just 4 percent; sales in the Americas were flat.
Richemont said growth in the quarter was boosted by a 10 percent sales surge, at constant exchange rates, in the month of December. Sales were powered by the launch of new product lines at Cartier, and the success of the Montblanc flagship on Madison Avenue in New York.
The company said Europe delivered mixed results in the period. France, Italy and Germany have suffered from low tourist numbers and a weak economic climate. However, that weakness was offset by “good performances” in the U.K., Spain and Russia.
In Japan, sales were below the prior year’s level in local currency terms, despite the positive impact of Cartier’s new Ginza boutique. Overall, the Asia-Pacific region was boosted by a marked increase in travel, the firm said.
Retail and wholesale sales each grew by 4 percent at constant currency rates, and declined 4 percent at actual rates.
All product categories, with the exception of textiles, leather and other businesses, saw a sales increase at constant exchange rates. Jewelry sales increased 2 percent at constant rates, but declined 7 percent at actual rates.
Cartier reported “modest growth” during the quarter, but was hit by a slowdown in the European and Japanese markets. Van Cleef & Arpels reported good growth during the period, the company said.
All watch houses reported growth in constant currency terms, while Montblanc benefited from product launches, product diversification and the new Madison Avenue store.
“We might be seeing a turn in the watch cycle, which has been a laggard,” said Gowen.
Watch sales rose 11 percent at constant rates, and increased 4 percent at actual rates, while writing instruments increased 9 percent at constant rates and 2 percent at actual rates.
Textile, leather and other businesses saw sales decline 3 percent at constant rates and 10 percent at current rates.
“Growth in sales at constant exchange rates at Alfred Dunhill and Chloé was offset by continuing weakness at Lancel,” the statement said, adding that sales at Hackett were flat versus last year.
As reported, Richemont has embarked on a major restructuring plan for Dunhill and Lancel.