Richemont reports 16 per cent decline in sales

by eyetee | September 21, 2009 12:00 am

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Luxury brand group Richemont says it saw a 16 per cent overall drop in sales for the first five months of 2009 through to August compared to last year.

As expected, the Americas experienced the steepest decline at 36 per cent, while China grew by five per cent, said executive chair Johann Rupert at the group’s annual general meeting earlier this month.

Sales in Japan fell by seven per cent and Europe, including the Middle East, decreased by 22 per cent.

All figures were reported at actual exchange rates.

The group’s retail business fared better, with only a seven per cent drop in sales. However, wholesale business decreased by 21 per cent, due to de-stocking by retailers, mostly in the Americas.

“As I made clear when we published last year’s results in May, despite our continuing cost-control measures, Richemont’s profitability for the first six months of this year will inevitably be significantly below that seen in the period to September 2008,” he said.

“Although the rate of decline in sales is slowing, we still urge caution. We would prefer to wait until we have more evidence of a broader economic recovery before speculating on the likelihood of a better second half, particularly when it comes to the wholesale business. The comparative figures for the second half of last year are already lower than for the first half and set a lower ‘hurdle’ in terms of performance. These comparatives, although lower, will be mitigated by an unfavourable currency environment in the second half.”

Richemont’s brands include Cartier, Van Cleef & Arpels, Jaeger-LeCoultre, Piaget, Baume & Mercier.

The jewellery maisons and specialist watchmakers divisions experienced declines in sales of 14 and 18 per cent, respectively.

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