Richemont Q3 sales hit by low demand for watches

Thursday, 15 January 2015

REPORT In its trading update for the third quarter ended December 31, 2014, Richemont said that its sales in the quarter were flat at constant exchange rates; and increased at 4 percent at actual rates.

In Asia Pacific, the decline in sales reflected an unfavourable basis of comparison and a difficult trading environment in most markets, primarily in Hong Kong and Macau. European sales benefitted from strong domestic sales and a return of visitors in the main tourist destinations, helped by favourable exchange rates.

The Americas region continued to report good growth, albeit at a slower pace than in the first six-month period. Sales were particularly driven by jewellery and the Net-a-Porter Group. Soft domestic demand in Japan partly reflected the continued impact of the surge in purchases made ahead of the April 2014 sales tax increase. That surge led to a 47 percent sales increase in the final quarter of the comparative financial year.

Retail continued to outperform the wholesale channel. Retail sales were supported by selective store openings, jewellery sales and Net-a-Porter. The Jewellery Maisons reported satisfactory sales growth in their own boutique networks. The decline in sales by the Group’s Specialist Watchmakers reflected both caution on the part of business partners in the wholesale channel and a lower performance of some retail locations, most notably in Hong Kong and Macau. In the group’s other businesses, the Net-a-Porter Group continued to report growth well above the group average.

Sales growth over the nine-month period to December was 2 percent at constant exchange rates or 3 percent at actual rates. The group’s results for the current financial year will be announced on May 22, 2015.

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