Richemont’s Q1 Sales Jumped 22% Ahead of 2019
The gains were driven by brisk business in the Americas - up 47 percent versus 2019 - and Asia-Pacific.
In another sign of luxury’s resilience – and pent-up demand – Compagnie Financière Richemont saw revenues bound 22 percent ahead of pre-pandemic levels in its first quarter ended June 30.
The gains were driven by brisk business in the Americas – up 47 percent versus 2019 – and Asia-Pacific, up 40 percent and with “good momentum” in Mainland China, Macau and South Korea.
Europe was the laggard, where sales contracted 15 percent in the three months. Richemont said “robust demand from local clientele could not offset the halt in tourist sales.”
Revenues in the Middle East and Africa zoomed ahead 55 percent, boosted by domestic and tourist spending in Dubai and Saudi Arabia.
Compared to the first quarter of 2020, group sales at Richemont rocketed 129 percent at constant exchange rates and 121 percent at actual exchange rates.
In a research note, RBC analyst Piral Dadhania applauded the stronger-than-expected results – which came in 10 percent above consensus.
“We would expect these results to be positively received by the market, which demonstrate ongoing momentum in Richemont’s key divisions,” Dadhania noted.
The Swiss luxury group trumpeted 43 percent growth at its jewelry maisons, headlined by strong jewelry and watch sales at Cartier and Van Cleef & Arpels. Sales at its specialist watchmaker – which include A. Lange & Söhne, Baume & Mercier, IWC Schaffhausen, Jaeger-LeCoultre, Panerai and Vacheron Constantin – grew by 6 percent.
Cartier’s Phaan ring Maxime Govet © Cartier
Other business, which include the fashion and accessories houses Alaïa, AZ Factory, Chloé, Dunhill, Montblanc and Peter Millar, declined 7 percent, with Richemont blaming “challenges in the wholesale channel, particularly in travel retail.”
By channel, retail sales were up 35 percent versus 2019 and particularly strong in the U.S., Russia and Saudi Arabia, according to Richemont.
Online sales rose 29 percent, while the wholesale channel eased 3 percent.
In tandem with the quarterly results announcement, Richemont said several of its top brand executives would relinquish their roles on the senior executive committee and board of directors.
Richemont said the changes in governance stem from “the ongoing pandemic and the continued acceleration of ‘new retail.'”
“To further capitalize on our group’s agility and momentum, the senior executive committee will focus solely on strategic direction, capital allocation, governance, and the provision of central and regional functions for the benefit of our maisons and businesses,” Richemont said. “Similarly, the executives in charge of our maisons and businesses will focus exclusively on the sustainable development of their respective entities, ensuring a customer-centric approach and the continued success of digital initiatives.”
Cyrille Vigneron, president and chief executive officer of Cartier, and Nicolas Bos, president and CEO of Van Cleef & Arpels, are to step down from the senior executive committee and will not seek re-election to the board of directors at the group’s AGM on Sept. 8. They continue to report directly to chairman Johann Rupert.
Philippe Fortunato, CEO of fashion and accessories, Emmanuel Perrin, head of specialist watchmakers distribution, and Frank Vivier, chief transformation officer, are also to step down from the senior executive committee. The three men continue to report to group CEO Jérôme Lambert.
Rupert, Lambert and Burkhart Grund, chief finance officer, are to remain on the senior executive committee and stand for re-election to the board of directors on Sept. 8.
“A stronger and more commercial product line-up at Cartier with better execution, ongoing Van Cleef strength and longer-term growth prospects for Buccellati underpin the earnings and (free cash flow) engine within Richemont,” Dadhania noted.