Sales Surge at Richemont, Predicts Solid First Half

Sales surged in April and May at Richemont, the world's second-largest luxury goods group, as the company forecasts a solid first half while voicing caution concerning its 2004/5 financial year as a whole.

Richemont, which owns luxury brands Cartier, Piaget, Van Cleef and Arpels, Dunhill and many others, said sales were up 23 and 21 percent respectively in April and May as the recovery, which started last summer, continued.

The group has posted an 11 percent rise in sales this year, ahead of rivals such as LVMH, the world's largest luxury goods group, and Gucci, which is undergoing restructuring as it looks to cut costs.

Net profit at Richemont regarded as a bellwether for earnings in the luxury goods and retail sector, in the year to end-March rose three percent to 660 million euros ($792 million).

“The group's results in the first half of this year will inevitably benefit from the improved performance that we are currently seeing,” Richemont said in a statement.

“Nevertheless we prefer to take a cautious stance as to the outlook for the remainder of the financial year,” it added.

Company chiefs said the rebound at the start of this financial year confirmed the recovery in the luxury goods sector but it was too soon to make predictions for the full year.

Demand for luxury goods slumped along with a fall in travel last year due to the outbreak of SARS and the war in Iraq, but Richemont’s 2003/2004 results were boosted by a restructuring charge of 91 million euros ($109 million) taken a year earlier.

The sector is recovering from a three-year recession that began following the September 2001 terror attacks in the United States and its impact on the key tourism sector, global stock markets and worldwide economic confidence.