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Richemont with two-digit sales drop


The luxury group closed the financial year with a 2% growth in sales, but the last quarter (ended 31st March 2020) was heavily impacted by Covid-19

Sales for the year increased to 14 238 million euros, growing by 2% at actual exchange rates and were broadly in line at constant exchange rates, having progressed by 8% and 5% respectively for the nine months ended on the 31st December 2019.

The significant disruption caused by the worldwide outbreak of the Covid-19 pandemic weighed on Richemont's fourth quarter sales, which declined by 18% at actual exchange rates and by 19% at constant exchange rates. At the end of the fourth quarter, 43% of Richemont's network of stores was closed and sales in that period declined by 18% at actual exchange rates, with sales in Asia Pacific down by 36%, including Hong Kong SAR, China, down by 67%; sales in Europe decreased by 9% while they rose by 9% in the Americas.

Yearly results

At actual exchange rates, sales for the year were higher or stable in most regions. Mid-single digit sales increases in Europe and Japan and double digit sales growth in the Americas more than offset a mid-single digit sales decline in Asia Pacific, which was largely attributable to the street protests experienced in Hong Kong for most of the year and the outbreak of the Covid-19 pandemic in the fourth quarter. At actual exchange rates, sales in the group’s directly operated boutiques were in line with the prior year, delivering a 7% increase in the first nine months of the financial year, supported by the Jewellery Maisons. The 4% decrease in wholesale sales reflected temporary store closures at retail partners in the fourth quarter of the year as well as tight management of inventories.

Online sales grew strongly across all business areas. Overall, sales growth was driven by Jewellery Maisons and Online Distributors. Excluding Online Distributors, sales for the year decreased by 3% at constant exchange rates and by 1% at actual rates.

Operating profit for the year decreased by 22% to 1 518 million euros and operating margin to 10.7%. Profit for the year decreased to 931 million euros.

About Richemont

Richemont operates in four business areas: Jewellery Maisons, namely Buccellati, Cartier and Van Cleef & Arpels; Specialist Watchmakers, namely A. Lange & Söhne, Baume & Mercier, IWC Schaffhausen, Jaeger-LeCoultre, Panerai, Piaget, Roger Dubuis and  Vacheron  Constantin; Online  Distributors,  namely  YOOX NET-A-PORTER GROUP  (NET-A-PORTER,  MR PORTER, YOOX, THE OUTNET) and Watchfinder & Co.; and Other, primarily Fashion & Accessories Maisons, including Alaïa, Chloé, dunhill, Montblanc and Peter Millar.

Image source: journal.hautehorlogerie.org
 
 
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