Richemont profits soar on demand for luxury goods
Friday 20 May 2011
The world's second-biggest luxury goods company, Richemont, said strong demand for its jewellery and watches had produced a surge in its annual profits and sales.
The Swiss group, which owns the Cartier jewellery, Montblanc pens and Chloe fashion brands, expanded its sales in all its regions but growth was strongest in Asia-Pacific, where sales were helped by exceptionally high demand in China.
It said that Net-a-Porter – the online luxury fashion retailer it acquired for €245m in April 2010 – also "generated a positive cashflow and performed above plan", as the sales came in at €274m (£242m). For the year to 31 March, Richemont's pre-tax profits rose by 83 per cent to €1.28bn, on sales up by a third at €6.89bn.
Johann Rupert, the executive chairman, said: "We have enjoyed record sales and profits from our jewellery [houses] and specialist watchmakers, despite the stronger Swiss franc. Profitability at Montblanc improved, with progress also being seen in the performance of fashion and accessories." Sales in the company's Asia-Pacific division rose by 36 per cent at constant exchange rates to €2.57bn. In the Americas sales were up 30 per cent at €998m and in Europe they increased by 20 per cent to €2.59bn.
In Japan sales rose by only 1 per cent to €737m, as a result of the "significant appreciation" of the yen. The earthquake on 11 March had only a "minimal impact" because it was close to Richemont's year-end. But analysts voiced concerns about its operating margin, which fell to a lower-than-expected 16 per cent in the second half.
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