Richemont Profits Rise As Sales Surge

by eggplant in BFI

A sales surge at luxury goods group Richemont has highlighted the recovery in top-end Swiss mechanical watches as the sector brushes off the threat posed by Apple and other makers of smartwatches. Richemont’s watch sales in the six months to September 30 were 15% higher than the same period a year earlier, the Swiss group reported on 10 November. Together with a stronger performance in jewellery, the rebound helped lift operating profits by 46% to EUR 1.17bn. Swiss watchmaking has been hit in recent years by sluggish global economic growth, excessive inventory, a clampdown on corruption in China — as well as the rise of the Apple Watch. But this year, the trends have largely gone into reverse. Richemont, whose brands include Cartier, Van Cleef & Arpels and Montblanc, said most of its markets were “in positive territory”, led by mainland China, Korea, the UK and “notably a return to growth” in Hong Kong, the largest export market for Swiss watches. Sales in the UK had been boosted by the weak pound since the country voted to leave the EU. The results were flattered, however, by exceptional measures a year ago to reduce excessive inventory, when Richemont bought back watches and destroyed them. Excluding the prior period’s one-time charges of EUR 249m, largely related to the buybacks, operating profits increased 11%.

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