The Geneva-based luxury goods conglomerate Richemont has announced its interim report and accounts for the six months ended 30 September 2024. Sales totalled at €10.1 billion (around $10.73 billion), down 1 percent from €10.22 billion (around $10.86 billion) a year ago. Operating profit fell 17 percent year-over-year from €2.66 billion (around $2.83 billion) to €2.21 billion (around $2.35 billion).
Jewellery and watches account for almost 90 percent of the group’s revenue. Sales of jewellery brands under the group which include Cartier, Van Cleef & Arpels, Buccellati, and Vhernier, continued to grow with 2-percent increase to €7.1 billion (around $7.5 billion). Limited price increases over recent months were not sufficient to fully offset raw material cost increases, notably that of gold.
The group’s watch brands including A Lange & Sohne, Baume & Mercier, IWC Schaffhausen and Jaeger-LeCoultre saw sales fall by 17 percent year-over-year to €1.66 billion (around $1.76 billion), largely due to the slowdown demand in China. This is affecting all watchmaking brands globally, with the high-end segments showing greater resilience. This 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, said Richemont.
Richemont reported solid growth in sales across all regions, except for Asia Pacific. In Europe and the Americas, sales increased by 4 percent and 10 percent at actual exchange rates, respectively, driven in both cases by robust local demand and by increased tourist spending in Europe. Asia Pacific sales contracted by 19 percent, as growth in some countries, including Korea and Malaysia, was more than offset by a double-digit decline in sales for mainland China, Hong Kong and Macau combined. This decline reflects reduced consumer spending and strong comparatives, as well as the impact of higher sales to Chinese tourists outside of the region, particularly in Japan. The strongest regional sales growth rate was once again posted by Japan, where sales were up by 32 percent compared to the prior-year period, resulting from domestic clientele growth as well as increased tourist spending, the latter partly fuelled by a weak Japanese Yen. Sales in the Middle East and Africa also grew, by 11 percent compared to the prior-year period. Richemont group chairman Johann Rupert said: “We saw solid sales growth across most of our regions offsetting continued weakness in Chinese demand.”
“Richemont demonstrated sustained resilience, against a challenging macroeconomic and geopolitical backdrop, supported by ongoing investment in our distribution and manufacturing capacities,” he added.
20-11-2024
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