Richemont’s luxury goods sold better in stores last year than online

A pedestrian walks past a Cartier luxury goods store at the Sandton City Shopping Centre. Richemont owns some of the most sought after luxury brands, such as Cartier. Photo: Bloomberg

A pedestrian walks past a Cartier luxury goods store at the Sandton City Shopping Centre. Richemont owns some of the most sought after luxury brands, such as Cartier. Photo: Bloomberg

Published May 20, 2024


Richemont’s sales of watches and other luxury branded products increased 3% to an all time high of €20.6 billion (R407bn) in its year to March 31, as sales grew across all regions and almost all channels excluding online, with growth led by Asia-Pacific in absolute terms and Japan in percentage terms.

The sales were led by Jewellery Maisons and retail segments. Asia-Pacific sales increased (10% at constant exchange rates) in value terms, and by Japan (20% at constant exchange rates) in percentage terms.

CEO Johann Rupert said the group delivered “a solid underlying performance” while successfully facing unfavourable foreign exchange movements, demanding comparatives, and ongoing macroeconomic and geopolitical uncertainty.

“We experienced a softening of sales in the fourth quarter in Asia-Pacific against challenging comparatives, which was more than offset by higher growth in all the other regions. As we predicted, a sustainable rebound in Chinese demand would take some time.

“We are encouraged by our increasingly balanced client mix across nationalities, with the emergence of several growth engines for the group,” he said.

Group operating profit fell 5% (+13% at constant exchange rates) to €4.8bn. There was solid profit for the year from continuing operations of €3.8bn. A €1.5bn loss was reported from discontinued operations mainly due to write-down of YOOX-Net-a-Porter (YNAP) assets.

Rupert said there were “ongoing” talks to sell the majority stake in YNAP, after an agreement to sell it to Farfetch and Symphony Global were terminated last December. Meanwhile, work was being carried out on re-platforming and solution design at YNAP.

The US had become the largest individual market for the group. The strongest channel performance was from retail (+11% at constant exchange rates), with growth across all business areas and regions.

The net cash position was up marginally and strong at €7.4bn, with solid increase in cash flow generated from operating activities to €4.7bn. A proposed ordinary dividend of 2.75 Swiss francs per A share represented a 10% increase over the previous year.

Rupert said the group’s directly operated stores generated the strongest channel performance (11% at constant exchange rates), “further demonstrating the success of a direct-to-client strategy”. With increases across all business areas and regions, retail sales contributed 69% of group sales.

On January 31, 70% of Gianvito Rossi, an Italian high-end shoe Maison, was acquired to enhance the group’s portfolio of Fashion & Accessories Maisons.

“Gianvito Rossi embodies exceptional ‘Made in Italy’ craftsmanship, elegance and timelessness, all qualities that the group is renowned for,” said Rupert.

On May 7, Richemont reached agreement to acquire 100% of Vhernier, an Italian jewellery Maison, “whose unique aesthetic perfectly complements our existing collection of renowned jewellery Maisons”, said Rupert.

The “Other” business area recorded a €43 million loss in the past year, with the Fashion & Accessories Maisons reaching break-even, driven by a heightened focus on creativity and higher sales at most Maisons, including double-digit growth at Alaïa.

Meanwhile, AFP reports Richemont named a new CEO on Friday as its 73-year-old founder and chairman Rupert hands off some of his responsibilities.

Nicolas Bos, the 51-year-old French head of Richemont's jewellery brand Van Cleef & Arpels, will start the job on June 1, the Swiss company said.