So­cial un­rest in France hits Richemont’s sales

Richemont lux­ury goods forced to close doors six Satur­days run­ning in France

Cape Times - - BUSINESS REPORT - SANDILE MCHUNU [email protected]

SWISS lux­ury goods com­pany Richemont ex­pe­ri­enced chal­lenges in Europe as its sales were neg­a­tively im­pacted by se­ri­ous so­cial un­rest in France dur­ing the quar­ter to end De­cem­ber. How­ever, the group did not re­veal the im­pact of the so­cial un­rest on its sales in the re­gion.

“Dur­ing the lat­ter part of the quar­ter, sales in Europe were af­fected by so­cial un­rest in France which neg­a­tively im­pacted tourism and led to store clo­sures for six con­sec­u­tive Satur­days,” the group said.

How­ever, the un­rest did not neg­a­tively im­pact the group’s over­all sales, as it re­ported a 25 per­cent in­crease in sales to €3.92 bil­lion (R62bn), boosted by the con­tri­bu­tion of YOOX Net-A Porter (YNAP), Watchfinder.co.uk (Watchfinder) and a dou­ble digit growth in main­land China.

The two ac­qui­si­tions YNAP and Watchfinder were con­sol­i­dated into the group’s ac­counts on May 1 and June 1, re­spec­tively, last year.

Sales in the quar­ter in­creased by 25 per­cent at ac­tual ex­change rates and by 24 per­cent at con­stant ex­change rates com­pared to the quar­ter to end De­cem­ber 2017.

The group said that, ex­clud­ing YNAP and Watchfinder, sales rose by 6 per­cent at ac­tual ex­change rates and by 5 per­cent at con­stant ex­change rates. How­ever, it ex­pe­ri­enced a de­cline in sales in the Mid­dle East and Europe.

Richemont ac­quired YNAP for around €2.7bn and Watchfinder in a pri­vate trans­ac­tion with share­hold­ers last year.

The group said the dis­posal of Lan­cel in June last year also weighed on the year-on-year com­par­i­son. Richemont sold the strug­gling French leather bag maker Lan­cel to Ital­ian high-end brief­case maker Pi­quadro in a profit share deal.

Richemont ex­pe­ri­enced a 10 per­cent in­crease in sales dur­ing the quar­ter in Asia Pa­cific, re­flect­ing a dou­ble digit sales growth in main­land China and good in­creases in other main mar­kets.

“Sales growth in Hong Kong slowed, pri­mar­ily due to the strength of the Hong Kong dol­lar ver­sus the ren­minbi that re­sulted in lower tourist spend­ing,” Richemont said.

How­ever, it said sales in the Amer­i­cas rose by 9 per­cent, ben­e­fit­ing from good per­for­mance by the Jew­ellery Maisons and the other busi­ness area.

Richemont owns in­ter­na­tional lux­ury brands such as A Lange & Söhne, Baume & Mercier, Cartier, Chloé, Dun­hill, IWC Schaffhausen and Van Cleef & Ar­pels.

In Ja­pan the group achieved 7 per­cent ex­pan­sion in sales which were driven by con­tin­ued do­mes­tic and tourist spend­ing as well as the im­pact of newly opened di­rectly op­er­ated bou­tiques .

Richemont shares closed 1.25 per­cent higher at R94.68 on the JSE on Fri­day.

BILLY HC KWOK Bloomberg

PEDES­TRI­ANS walk past a Cartier lux­ury store, op­er­ated by Cie Fi­nan­cière Richemont, in Taipei, Tai­wan |

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