Richemont H1 Jew­ellery Sales -13% To €2.7bn

Solitaire - - SPECTRUM -

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.

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