Still liv­ing it up De­spite un­cer­tainty re­gard­ing the global econ­omy, and con­sumers in­creas­ingly com­ing un­der pres­sure, Richemont can still count on the wealthy to en­joy its lux­u­ries.

Finweek English Edition - - MARKETPLACE -

lux­ury group Richemont, which is chaired by bil­lion­aire busi­ness­man Jo­hann Ru­pert, was cre­ated in 1988 by the spin-off of the in­ter­na­tional as­sets owned by the Rem­brandt Group Ltd of South Africa (today known as Rem­gro). Richemont, which is based in Switzer­land, owns sev­eral of the world’s lead­ing lux­ury brands, in­clud­ing Cartier, Vacheron Con­stantin, JaegerLeCoul­tre, IWC Schaffhausen, Van Cleef & Ar­pels, Pi­aget, Pan­erai, Dun­hill and Mont­blanc.

It is the largest jewellery player world­wide and Richemont has proven its busi­ness acu­men in terms of mak­ing the right de­ci­sions re­gard­ing its foot­print and mer­chan­dis­ing, suc­cess­fully de­vel­op­ing both the high-end jewellery seg­ment and prod­uct lines across a wide price range.

In re­cent years growth has been achieved quite eas­ily for the lux­ury goods sec­tor, es­pe­cially com­pa­nies which had ex­po­sure in China and other emerg­ing mar­kets. How­ever, con­cerns over lower com­mod­ity prices, a weak de­mand en­vi­ron­ment and the con­tin­ued strength of the Swiss Franc have weighed on the group. Mar­gins are di­rectly im­pacted by raw ma­te­rial prices and cur­rency fluc­tu­a­tions, which makes it very dif­fi­cult to make pre­dic­tions in the cur­rent en­vi­ron­ment, given the ex­treme volatil­ity that we are ex­pe­ri­enc­ing.

In Richemont’s lat­est trad­ing up­date for the quar­ter to end De­cem­ber, it saw sales of €2.9bn, re­flect­ing a year-on-year de­cline of 4% at con­stant ex­change rates, but an in­crease of 3% at ac­tual rates. Jewellery sales ac­counted for nearly 55% of to­tal sales, with watches con­tribut­ing 28.2%. Asia Pa­cific re­mains the most im­por­tant ge­o­graph­i­cal area for the group, con­tribut­ing 35.3% of sales, fol­lowed by Europe’s 29.7% and the Amer­i­cas’ 19.6%. Jewellery con­tin­ued to ex­pe­ri­ence growth across most re­gions and prod­uct cat­e­gories, which com­pen­sated for the weak de­mand of watches, the group said. Com­pared to the first six months of the cur­rent year, the slow­down in sales largely re­flected weak trad­ing in Europe, ac­cord­ing to its trad­ing state­ment.

Its net profit for the year will also ben­e­fit from an one-time ac­count­ing gain of €620m re­lated to the merger of The NET-A-PORTER GROUP and YOOX Group, an­nounced in Oc­to­ber 2015. Richemont holds a non-con­trol­ling in­ter­est in the en­larged group.

Speak­ing in Geneva in Novem­ber 2015, Ru­pert said Richemont ex­pected the sec­ond half of the

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.