Richemont Upbeat on Christmas Sales After Strong H1
November 18, 04
Richemont, the world's second largest luxury goods firm, is forecasting strong sales during the vital Christmas season as it posted a sharp rise in operating profits for its first half, which runs from April to March, boosted by a sector-wide recovery.
The company, which owns luxury brands Cartier, Piaget, Van Cleef and Arpels, Dunhill and many others, said today (Thursday) a trend of growing sales had continued into October, with sales up 8 percent for the month.
Demand for luxury goods slumped last year due to the outbreak of SARS and the war in Iraq.
Richemont’s sales rose 14 percent to 1.74 billion euros ($2.27 billion), lifted by the Cartier watch range, resulting in core net income - which leaves out a 238 million euro contribution from its stake in British American Tobacco - of 173 million euros ($225.4 million).
Group net profit rose 42 percent to 411 million euros ($535.6 million). Due to its size and influence, Richemont is regarded as a bellwether for earnings in the luxury goods and retail sector.
Along with the rebound in luxury goods sales and an overhaul of its Cartier brand, the group's operating profit jumped 157 percent to 208 million euros ($271.1 million) in the first six months of its financial year.
Chief Financial Officer Richard Lepeu said he expected to see continued high single-digit sales growth for the rest of this year due to increasing demand in Europe and Asia, as the luxury goods sector continues to recover from a three-year downturn.
Richemont has launched new watches this year as it tries to revive its flagship Cartier brand, which has declined in recent years, and expects a strong Christmas season.
"Assuming a continuation of the trends that we have seen in recent months, we believe that the group should enjoy a strong pre-Christmas season," Executive Chairman Johann Rupert said.
Confirming the watch sector’s recovery, Swiss watch exports rose by 5.1 percent year-on-year in October, the Federation of the Swiss Watch Industry said today, achieving the largest-ever monthly value recorded by Swiss watch makers.