LONDON – Cartier parent Compagnie Financière Richemont held steady in the first fiscal half despite the turbulent backdrop for luxury with sales falling 1 percent to 10.1 billion euros, and profit declining to 457 million due chiefly to the sale of Yoox Net-a-porter to Mytheresa.
The declines came from continued weak demand in Asia-Pacific, where sales were down 19 percent, led by China. By contrast, the Americas and Japan continued to grow, at 10 percent and 32 percent respectively in the six-month period.
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Sales of jewelry, Richemont’s strongest category, rose 2 percent while specialist watches fell 17 percent, dented mainly by the slowdown in China.
Richemont said the decline in demand for watches “highlights the need for discipline and caution regarding overproduction, and underscores the importance of adapting to changing market conditions, which will ultimately contribute to maintaining higher product desirability.”
Sales at Richemont’s “other” category, which includes the fashion and accessories maisons, were up 4 percent. Fashion and accesories rose 2 percent driven by the performance of the Alaïa and Peter Millar brands.
Overall, the other business area recorded a 52 million euros operating loss, 23 million euros of which was from the Fashion and Accessories division.
Operating profit for the period was down 17 percent to 2.21 billion euros. Profit from continuing operations fell to 1.73 billion euros from 2.16 million euros in the six-month period.
Richemont’s shares were down 5.6 percent to 120.6 Swiss francs at 12:02 p.m. CET.
Richemont chairman Johann Rupert said the group had delivered “sustained resilience in a world where uncertainty has become the norm. We saw solid sales growth across most of our regions offsetting continued weakness in Chinese demand, which, as I had predicted, will take longer to recover and is particularly affecting our specialist watchmakers.”
Rupert emphasized that “what we are seeing in the world today is not unprecedented. It illustrates just how important it is to have strong leadership with a long-term vision, to continue to invest in our maisons’ excellence in crafting and marketing distinctive and timeless creations, to manage our offer with discipline, and to have an agile structure and a solid balance sheet.”
He added that while he remains cautious in the uncertain context, “I am confident in our ability to navigate the current as well as future cycles and to deliver sustained value over the long term for all stakeholders.”
