Richemont’s third quarter sales of its luxury products increased by 8% for the third quarter to December 31 driven in the main by double-digit growth in Japan and Europe.
The group, which owns brands such as Dunhill, Cartier, Baume & Mercier and Montblanc, said yesterday that sales for the third quarter was up by 5% at constant exchange rates and by 8% at actual exchange rates, on the back of strong comparatives and disruption of trading in mainland China due to Covid-19.
There had been sales growth across all regions with the exception of Asia Pacific, which was impacted significantly by China’s underperformance, Richmont said in an ad hoc announcement.
There had also been growth across all distribution channels, led by the retail and online retail channels.
The jewellery maisons and other business areas reported double -digit sales growth, offsetting a 3% sales reduction and the Specialist Watchmakers.
The groups’ net cash position further increased to €5.5 billion (R101bn), up €0.6bn, following the quarter’s solid trading, and despite increased dividend and stock replenishment during the year.
Sales growth in the Middle East & Africa and Japan increased by 20% and 30% in actual terms, respectively. Online retail growth stood at 12%
The group said Japan continued to lead growth with sales up by 43%, followed by Europe where sales grew by 19%.
Japan saw both solid domestic sales and a gradual return of tourism supported by the lifting of Covid restrictions mid-October, as well as a comparatively weaker yen.
In Europe, sales growth was driven by continued strength in local and tourist demand, primarily from the US and Middle East, underpinned by favourable exchange rates.
France, Italy and Switzerland’s performances were particularly noteworthy, the group said. Sales in the Middle East & Africa region rose 10%, benefiting from the Qatar World Cup, which added inbound tourist purchases to sustained local demand.
In the Americas, sales growth moderated to 3%, partly reflecting a greater share of purchases abroad given the strong US dollar. Overall, sales to the American clientele remained solid, growing by high-single digits.
In Asia Pacific, sales fell 9% as marked sales growth in South Korea and South-east Asia, notably in Australia and Singapore, only partially mitigated lower sales in mainland China, Hong Kong and Macau.
The sharp increase of Covid cases reduced customer traffic and, due to staff unavailability, led to a reduction of boutique opening hours or temporary closures of points of sale in mainland China, leading to a sales drop of 24% during the period.
Richemont’s share price 0.95% to R258.45 on the JSE early yesterday afternoon.
BUSINESS REPORT