Richemont re­ports an un­ex­pected boost in rev­enue

The Star Early Edition - - INTERNATIONAL -

RICHEMONT, the maker of Cartier neck­laces and IWC Schaffhausen time­pieces, re­ported an un­ex­pected gain in Christ­mas-sea­son rev­enue, boosted by de­mand for lux­ury jew­ellery and a re­bound in watch sales at its own stores.

Rev­enue gained 5 per­cent ex­clud­ing cur­rency shifts in the three months to De­cem­ber, it said in a state­ment yes­ter­day.

An­a­lysts had pre­dicted flat sales for Richemont’s third quar­ter, ac­cord­ing to the me­dian es­ti­mate in a Bloomberg News sur­vey. The com­pany has been strug­gling with the big­gest down­turn for the Swiss watch in­dus­try since the quartz cri­sis in the 1980s by buy­ing back un­sold in­ven­tory from re­tail­ers and cut­ting jobs at Cartier, Vacheron Con­stantin and Pi­aget.

A re­turn to sales growth in Richemont’s own watch sales might por­tend bet­ter or­ders from third-party re­tail­ers, said Alessan­dro Miglior­ini, an an­a­lyst at Mirabaud Se­cu­ri­ties.

Sales im­proved in all re­gions, giv­ing Richemont respite af­ter rev­enue fell 12 per­cent in the first half.

“The Swiss watch in­dus­try has rea­son to be more op­ti­mistic,” Miglior­ini said. “The im­prove­ment is driven by Asi­aPa­cific, with the Chi­nese as the most im­por­tant cus­tomer base, but the re­gional im­prove­ment is more wide­spread than that.”

Whole­sale sales of watches re­mained neg­a­tive, lead­ing to a 2per­cent de­cline in rev­enue at the unit at con­stant cur­ren­cies. Rev­enue in Asia-Pa­cific, which ac­counted for about a third of to­tal sales in the first half, gained 10per­cent.

Richemont’s re­tail sales rose 12 per­cent. Whole­sale rev­enue dropped 3 per­cent, com­pared with a 20 per­cent de­cline in the first half.

“The re­tail per­for­mance, in par­tic­u­lar, is pos­i­tive as this is the signal that un­der­ly­ing con­sump­tion is re­cov­er­ing and as such whole­sale re-or­der­ing could fol­low,” said Zuzanna Pusz, an an­a­lyst at Beren­berg.

The com­pany over­hauled its man­age­ment last Novem­ber, elim­i­nat­ing the role of chief ex­ec­u­tive as Richard Lepeu was set to re­tire this year and eight di­rec­tors stepped down.

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