Richemont lifts its net cash position on strong sales in China
JOHANNESBURG - RICHEMONT, the Switzerland-based luxury goods holding company, posted an improved net cash position at the end of the December quarter compared to a year earlier as strong sales in China offset the contraction recorded in Europe.
Richemont, which was founded by South African businessman Johann Rupert and whose luxury brands include Cartier and Van Cleef & Arpels, said its net position had improved to €2.9 billion (R52.8bn) at the end of the December quarter from €2.4bn a year earlier.
Overall sales growth was 5 percent at constant exchange rates compared to the prior year period, and was 1 percent higher in the quarter at actual exchange rates in a volatile environment.
The group said the 5 percent sales increase in constant exchange rates was driven by 25 percent sales growth in Asia Pacific with sales from China soaring 80 percent and sales from Taiwan increasing 29 percent more than offset declines in other Asian locations.
However, sales in Europe contracted by 20 percent, following the renewed public health protection measures and a halt in tourism. In the Americas, sales rose by 3 percent supported by relatively strong domestic sales.
“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,” said the group.
Richemont recorded a 27 percent increase in sales in the Middle East and Africa reflecting good performance across channels, resumed tourist spending in Dubai and solid domestic spending, notably in Saudi Arabia.
Sales in Japan rose by 1 percent, benefiting from resilient local demand before public health measures were re-instated in major population centres.
The online retail channel posted the strongest growth, and was 17 percent higher than the previous period confirming the acceleration in online luxury shopping witnessed in previous quarters.
“Demand was strong across many locations including China, Japan, the US and France,” said the group.
The group recorded a 14 percent sales increase at the Jewellery Maisons, which 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,” said the group.
However, sales in the wholesale channel were 8 percent lower than in the prior year period, notwithstanding higher sales in Asia Pacific and the Middle East and Africa.
The group's other business area posted a 13 percent reduction in sales, reflecting challenging trading conditions, particularly in travel retail locations, for the fashion & Accessories Maisons, except for Peter Millar which recorded growth.
Richemont's share price closed 1.23 percent higher at R143.75 on the JSE yesterday.