Richemont sales boost luxury sector

20 January 2010

GENEVA: Richemont, the luxury goods giant, saw its sales levels increase during the final quarter of last year, indicating that trading conditions in the sector may be starting to improve.

The company, which owns Cartier and premium watch brands including Jaeger LeCoultre, posted a 2% uptick in revenues in the closing three months of 2009, to €1.59 billion ($2.27bn; £1.39bn).

"The improvement in trading is welcome in the context of a generally difficult economic environment," Richemont said in a statement.

Asia Pacific grew by 25% year-on-year, to €492m, while the Americas were down by 2%, to €246m, although this region expanded by 8% when figures were adjusted to reflect currency fluctuations.

Europe posted a decline of 4%, to €656m, at actual rates, with Japan off by a more substantial 12% on the same basis, on €191m, reflecting the "challenging" climate in the Asian nation.

By category, jewellery sales were up by 5% to €837m, as were watches, by 3% to €417m, while writing instruments saw a drop of 1%, to €183m.

In contrast, Richemont's "other operations", which include fashion, accessories and parts for watches, experienced a slide of 8%, to €148m.

Jon Cox, an analyst at Kepler Capital Markets, described its results in Q4 as being "better than expected across the board."

"Forget Japan, China is the new driver of the luxury goods industry. Renewed strength in the US is also reassuring," he added.

For the nine months ending on December 31st, Richemont's revenues had decreased by 9%, to €3.96bn overall.

Data sourced from Financial Times; additional content by Warc staff