Richemont H1 Jewellery Sales -13% To €2.7bn
Luxury giant Richemont reported a drop in jewellery sales for the six-month period that ended September 30 2016. Richemont said the 13% decline in sales to €2.7 billion at its jewellery maisons – Cartier, Van Cleef & Arpels and Giampiero Bodino – is primarily attributable to watches, which were significantly impacted by the initiative to assist multi-brand retail partners worldwide. Resilient jewellery sales limited the decline, it noted. A number of Richemont’s maisons proactively assisted their multibrand retail partners in order to improve the quality of their inventory by buying back slow moving pieces.
The operating result was 31% lower than in the prior period, pressured by lower sales and the costs associated with the exceptional inventory buy-backs. This led to an operating margin of 27%. Excluding these costs, the operating margin would have been 32%.
Johann Rupert, Richemont chairman, said, “Positive developments in accessories and resilience in jewellery partly mitigated poor watch sales. From a geographic perspective, most markets experienced a slowdown in sales with the notable exceptions of mainland China, the UK and Korea.
“We remain convinced of the long-term prospects for high quality products, in particular for watches and jewellery. Our maisons stand for timelessness, quality and craftsmanship – values that are particularly sought after in uncertain times. Richemont, with its portfolio of longestablished maisons, strong balance sheet and worldwide geographic footprint, is well positioned to weather the current difficult environment and emerge stronger when global circumstances improve.”
In related news, Richard Lepeu, chief executive officer, has intimated his intention to retire with effect from March 31 2017, when he will have reached retirement age. Gary Saage, chief financial officer, will re-join his family in the US and retire from his current role effective July 31 2017. The board decided to restructure the responsibilities of senior management in the group, recognising the need to be able to react quickly to the challenges facing businesses in general and the luxury industry at this time. At the annual general meeting to be held in September 2017, Nicolas Bos will join the board in his capacity as CEO of Van Cleef & Arpels.