Richemont grows in the Christmas quarter, especially in the jewelry business
Published: Thursday, Jan 18th 2024, 08:10
Updated At: Friday, Jan 19th 2024, 00:59
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The luxury goods group Richemont, known for brands such as Cartier and IWC, continued to grow in the Christmas quarter. However, the growth momentum has slowed somewhat. The Geneva-based group's driving force remains its jewelry business.
In the third quarter of the 2023/24 financial year, i.e. from October to December, Richemont's sales rose by 4 percent to 5.59 billion euros, as the Group announced on Thursday. In local currencies, sales increased by 8 percent. Analysts had expected an average increase of 6.8 percent.
In the first nine months of the financial year, Richemont recorded cumulative currency-adjusted growth of 11 percent in an environment characterized by economic and geopolitical uncertainties, the report continued. Growth was thus only slightly weaker than in the first half of the year (+12%).
Jewelry in high demand
Richemont grew particularly strongly in the jewelry business with the flagship brands Cartier and Van Cleef & Arpels as well as the recently acquired jewelry house Buccellati. In the quarter under review, currency-adjusted sales increased by 12 percent. The jewelry business has been a guarantee of success in the Group's portfolio for years.
Meanwhile, the watch division grew by 3 percent, with the brands IWC, Jaeger LeCoultre, Lange & Söhne and Vacheron Constantin selling well, particularly in the company's own boutiques, according to the press release. The "Other" division with fashion and accessories houses such as Chloé, Dunhill and Montblanc recorded a one percent decline in sales.
Recovery in Asia
Broken down by region, Richemont stores made particularly strong gains in Asia. A year ago, business on this continent was still impacted by measures to contain the coronavirus pandemic. In the third quarter of 2023/24, the Group's sales in local currencies climbed by 18% in Japan and by 13% in Asia-Pacific.
Business in mainland China, Hong Kong and Macau developed particularly strongly with growth of 25 percent, Richemont wrote. In Europe, on the other hand, sales fell by 3 percent due to a decline in business with US tourists. In North, Central and South America, sales rose by 8 percent.
Richemont does not publish profit figures for the third quarter. As usual, Richemont also did not provide a concrete outlook for the rest of the financial year. Meanwhile, Richemont's coffers remain well filled. The net cash position amounted to 6.8 billion euros at the end of December, compared with 5.5 billion a year earlier.
It remains unclear what path Richemont will take with its online subsidiary YNAP after the failed sale to the British online retailer Farfetch. Options are still being examined and co-owners are being sought, according to the statement. YNAP is listed in the books as a "discontinued operation" and posted 11 percent less turnover in the third quarter.
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