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Richemont's Q3 sales boosted by growth across geographies

By Prachi Singh

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Management

For the third quarter to December 31, 2019, Compagnie Financière Richemont SA said sales progressed by 4 percent to 4,156 million euros (4,628.7 million dollars), with growth in all regions except Japan. Sales in Europe grew by 9 percent to 1,263 million euros, benefiting from favourable comparative numbers and strong sales in most markets (1,406.6 million dollars). The company added that sales in Asia Pacific increased by 2 percent to 1,429 million euros (1,591.5 million dollars), driven by strong double digit sales growth in China and Korea, which more than offset a severe sales contraction in Hong Kong SAR, China and contrasted performances in other Asian markets.

Sales in the Americas rose by 5 percent to 874 million euros (973.4 million dollars), led by good performances in the US that compensated for declines in other markets. The 3 percent sales increase to 249 million euros (277.3 million dollars) in the Middle East and Africa reflected a good performance of retail and favourable comparative numbers in a soft economic environment. Sales in Japan decreased by 7 percent, impacted by lower tourist spending given a comparatively stronger Japanese yen and the October 2019 value added tax increase that benefited first half sales.

Richemont’s retail channel witnesses sales growth in Q3

The company further said that retail channel posted a 5 percent increase in sales to 2,212 million euros (2,463.7 million dollars), notwithstanding the negative impact of temporary store closures in Hong Kong SAR, China during most of the period under review. The online retail channel saw a mid-single digit sales progression to 747 million euros (832 million dollars), with strong demand in the US. Sales in the wholesale channel were broadly in line with the prior year period to 1,186 million euros (1,321 million dollars), reflecting good performance of franchise stores, notably in Korea, offset by the impact of ongoing cautious watch inventory management and distribution optimisation initiatives which have now reached completion.

Richemont said 6 percent sales progression to 2,162 million euros (2,408.3 million dollars) at Jewellery Maisons was broad-based, driven by jewellery and watches across collections and the performance of Cartier, Van Cleef & Arpels and Buccellati was particularly noteworthy given the negative impact of Hong Kong SAR, China. Sales grew in all regions except Japan. The Specialist Watchmakers registered modest sales growth to 818 million euros (911 million dollars), notwithstanding a challenging situation in Hong Kong SAR, China, with higher sales in directly operated boutiques and wholesale sales broadly in line with the prior year period.

At the Online Distributors, the company added, an increasingly competitive pricing environment in online retail and disruption caused by storm damage to Mr Porter’s Landriano warehouse facilities limited sales growth to 2 percent. The Group’s other businesses recorded a 3 percent decline in sales to 522 million euros (581.4 million dollars), reflecting challenging trading conditions for our Fashion & Accessories Maisons with the exception of Peter Millar, which continued to show strong momentum in the US.

For the nine-month period, sales increased by 8 percent at actual exchange rates and by 5 percent at constant exchange rates, broadly in line with the trend seen in the first six months of the financial year.

Picture:Olaf Tamm Hamburg Germany for Richemont

Richemont