Growth in Asia drives 5 percent sales increase at Richemont
For the third quarter to December 31, 2020, sales at Compagnie Financière Richemont SA increased by 1 percent at actual exchange rates and by 5 percent at constant exchange rates to 4,186 million euros compared to the prior year period. In the nine-month period, the company recorded sales decrease of 16 percent at actual exchange rates and by 14 percent at constant exchange rates, a marked improvement over the performance in the first six months of the financial year.
The company said in a statement that robust sales in Asia Pacific and the Middle East and Africa, both with double-digit growth at actual exchange rates, more than offset single digit declines in the Americas and Japan and a marked contraction in Europe. A double digit increase in online retail sales and single digit progression in retail sales, the company added, compensated lower wholesale sales at actual exchange rates.
Highlights of Richemont’s third quarter performance
Richemont further said that the quarter under review was characterised by a varied performance across regions, with the continued spread of Covid-19 resulting in a halt in international tourism and temporary closures at points of sales in line with changing local lockdown measures.
Sales progressed by 5 percent, driven by 25 percent sales growth in Asia Pacific to 1,729 million euros, where robust results in China, up 80 percent and Taiwan (China), up 29 percent more than offset declines in other Asian locations. Sales in Europe contracted by 20 percent to 982 million euros, affected by renewed public health protection measures and a halt in tourism.
In the Americas, sales rose by 3 percent to 841 million euros, supported by relatively strong domestic sales. The strong 27 percent sales increase in the Middle East and Africa to 299 million euros, the company said, reflected good performance across channels, resumed tourist spending in Dubai and solid domestic spending, notably in Saudi Arabia. Sales in Japan rose by 1 percent to 335 million euros.
The online and offline retail channels both posted sales growths, more than offsetting a decline in the wholesale channel. The retail channel recorded an 8 percent sales increase to 2,288 million euros, driven by double-digit growth at the Jewellery Maisons, despite the negative impact of temporary store closures. Retail sales were strong in China, Taiwan (China), Russia and Saudi Arabia. With 17 percent sales growth to 841 million euros, the online retail channel posted the strongest relative performance. Demand was strong across many locations including China, Japan, the United States and France. Sales in the wholesale channel were 8 percent lower than in the prior year period to 1,057 million euros, notwithstanding higher sales in Asia Pacific and the Middle East and Africa.
Review of Q3 sales results across core product categories at Richemont
The 14 percent sales progression at the Jewellery Maisons to 2,366 million euros, Richemont added, was supported by good jewellery and watch sales at Cartier and Van Cleef & Arpels. Sales grew in all regions except Europe, and across all channels. The Specialist Watchmakers’ sales decreased by 4 percent to 758 million euros, with declines in all regions excluding Asia Pacific where sales grew by double digits, partly sustained by the Watches & Wonders event in Sanya.
At the Online Distributors, sales growth was 4 percent to 668 million euros, while, the group’s other business area posted a 13 percent reduction in sales to 436 million euros, reflecting challenging trading conditions, particularly in travel retail locations, for fashion & accessories maisons, except for Peter Millar which recorded growth.
The group’s net cash position amounted to 2.9 billion euros at the end of the period under review.
Picture:Olaf Tamm Hamburg Germany for Richemont