Not all images were able to load for printing. Please close the print window and try again. Richemont Announces Strong 2017-2018 Results – Sales and Operating Profit on the Rise
The Swiss Luxury Powerhouse continues to generate sales and profits.
Echoing its rivals in the luxury goods industry – including LVMH, Kering or Swatch Group – Swiss luxury powerhouse Richemont just announced growth for the year ending 31 March 2018. Sales increased by 3% at actual rates and by 8% at constant rates to EUR 10,979 million. The group reports strong performance in its retail network. Operating profit grew 5% and the proposed dividend will be CHF 1.90 (a 6% increase compared to previous period).
Richemont’s results confirm the positive trend of the watchmaking and jewellery markets. Swiss watchmakers have seen business improving over the past months after a prolonged downturn (the 2015-2016 crisis had a negative impact on most watchmaking brands). Swatch Group sales increased 5.8% in 2017; LVMH Watches & Jewelry division sales were up 10%. Swiss watch exports increased 2.7% in 2017 and 10.1% over the first quarter of 2018.
Concerning the different regions, Asia Pacific (China, Hong Kong, Korea and Macau) has a huge impact on these positive figures, with a 17% rise in sales. This region, which accounts for 40% of the group’s sales, remains one of the largest threats too, knowing its volatility. Americas and Japan are also recovering with an increase in sales of +8% and +6% respectively. Finally, Europe, which accounted for 27% of overall sales, is the only region to show declining sales (-2%). Sales in Europe are impacted by the relative strength of the euro and inventory buy-backs in the fourth quarter of the year.
The past months have been particularly busy. Richemont addressed challenges by taking significant measures including a wide management reshuffle. Among key changes, in November 2017, Jérôme Lambert was appointed Chief Operating Officer. Emmanuel Perrin was named Head of Specialist Watchmakers Distribution.
A few days ago, the luxury conglomerate took control of Yoox Net-a-Porter to ramp up its internet retail strategy in the frame of an offer to increase its stake launched in January. Richemont also announced the launch of a new brand, Baume, offering lower-priced trendy, customisable, eco-responsible watches to be sold online only.
To access the press release, please visit www.richemont.com.
1 response
When watch manufacturers or groups post strong results I hear a lot of people expressing how unhappy they are about the news and invoking the risk that brands will increase their prices in the same ridiculous way they did the last decade. Here comes the hubris again. It is really a shame but it is definitely the brands’ fault that watch lovers now wish all companies make losses and struggle and feel the pressure so that they keep the prices low.
For my part I know it’s an automatic mechanism. If the hubris kicks in and watch brands increase prices further they will soon run into trouble again.