“Richemont today reports a satisfactory set of results for the year ended 31 March 2014, supported by improvements in Asia Pacific, the Americas and Japan. Strength in the jewellery and specialist watch segments offset the softness of certain fashion maisons and Montblanc. As a result, and taking into account the substantial currency headwinds which weighed on the group’s overall performance, operating profit was in line with the prior year,” opined Yves-André Istel, Chairman of Richemont.
Europe accounted for 37 percent of overall sales. Following the previous year’s high comparative growth, sales in the region moderated to a high single-digit rate. Sales in the Asia Pacific region accounted for 40 percent of the group total, with Hong Kong and mainland China the two largest markets. The overall rate of growth during the year marginally improved. Sales growth in Hong Kong and Macau was satisfactory, whereas sales in mainland China were below the prior year’s level. The decrease in mainland China reflected the performance in the wholesale channel. Korea and Australia enjoyed strong double-digit growth.
The Americas region, which accounted for 15 percent of group sales, posted an accelerated growth compared to the prior year, primarily driven by domestic demand. Sales growth in Japan was robust, benefiting from strong domestic consumption.
Retail sales, comprising directly operated boutiques and Net-a-Porter, increased by 8 percent. Retail sales growth continues to exceed the growth in wholesale sales and 55 percent of group sales were generated through the maisons’ boutique networks during the year.
The jewellery maisons - Cartier and Van Cleef & Arpels grew by 4 percent in a subdued environment. The Maisons’ boutique networks reported good growth and also benefitted from further openings. The operating margin was in line with the prior year at 35 percent. The Specialist Watchmakers’ sales increased by 9 percent overall and all reported improved results, including Baume & Mercier. Unfavourable currency effects and soft sales across product categories and geographies, particularly in mainland China, led to a 5 percent sales decrease. Compared with other group businesses, Montblanc sales were down 6 percent.
In the month of April, sales increased by 1 percent at actual exchange rates, and by 6 percent at constant exchange rates. At actual rates, all regions reported sales growth except for Japan, where the sales tax increase became effective on April 1. The retail channel continued to outperform wholesale in all regions except Japan. Excluding Japan, sales increased by 4 percent at actual exchange rates, and by 8 percent at constant exchange rates.
As previously announced, Johann Rupert will conclude his sabbatical year of absence in September. He will stand for election as Chairman of the board at Richemont’s annual general meeting, to be held on September 17, 2014.