COMPANIES Social unrest in France hits Richemont’s sales
Richemont luxury goods forced to close doors six Saturdays running in France
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.
PEDESTRIANS walk past a Cartier luxury store, operated by Cie Financière Richemont, in Taipei, Taiwan | Bloomberg