In the first six months of the financial year, Richemont luxury Group, the parent company for Buccellati, Cartier, Van Cleef & Arpels, and Montblanc among others, reported another set of strong results as the momentum seen in the first quarterof the financial year continued into the second quarter. Sales from continuing operations increased by 24% to € 9.7 billion and operating profit from continuing operations by 26% to € 2.7 billion.
Compared to the prior-year period, double-digit sales increases were recorded, at actual exchange rates, across all business areas, channels and regions excluding Asia Pacific where sales grew by 3%. Growth was led by the retail channel which, together with the online channel, contributed 73% of Group sales.
In terms of business areas, all grew profitably, with the highest growth rates in sales at +27%, recorded by the ‘Other’ segment mostly composed of Fashion & Accessories Maisons, and the highest profitability at 37.1%, generated by the Jewellery Maisons.
With a 24% sales growth overall and higher sales in all regions and distribution channels, Richemont’s Jewellery Maisons, Buccellati, Cartier and Van Cleef & Arpels, reaffirmed their leading position. To further support their strong development, manufacturing sites are being expanded, operational teams reinforced, and communication initiatives intensified. Their superior growth was driven by the retail channel, which generated over three quarters of the Maisons’ sales.
Richemont’s Specialist Watchmakers expanded sales by 22%, with all luxury Maisons, regions and distribution channels recording growth, a reflection of their strong appeal and the successful ‘iconisation’ of their collections.
The Specialist Watchmakers also benefited from an overall growing interest for high-quality watches across generations. Three of the Maisons are now of very significant scale, approaching € 1 billion euros in annual sales. Of note is the continued shift in demand towards directly operated stores, both physical and online, and mono-brand franchise stores. Sales in these branded environments accounted for over 70% of the Specialist Watchmakers’ sales.
The Group’s ‘Other’ business area, which now includes Watchfinder, saw nearly all luxury brands post sharp sales growth across channels and regions.
Creativity and execution drove a 27% sales growth and improved profitability of € 56 million. Chloé, Montblanc and Peter Millar, including G/FORE, contributed most to the sales increase. Delvaux generated the sharpest growth rate in sales.
The Group’s three Jewellery Maisons, Buccellati, Cartier and Van Cleef & Arpels combined, generated a 24% year-on-year increase in sales.
This excellent performance was sustained by growth in all regions and distribution channels. Growth was the strongest in the Jewellery Maisons’ directly operated stores, which contributed over three quarters of the business area’s sales.
All product categories did well, including the relaunched silver offer at Buccellati. Iconic jewellery collections such as Clash and Trinity (Cartier), Alhambra and Fauna (Van Cleef & Arpels) and Opera Tulle and Macri (Buccellati), to name a few, continued to outperform. In watches, the Tank and Santos (Cartier) and Poetic Complications (Van Cleef & Arpels) collections stood out.
Operating result rose by 22% to € 2 354 million, primarily reflecting higher sales, together with increased investment in the retail network, manufacturing and communication.
New store openings during the period included Buccellati in Shin Kong Place (Chengdu) and Singapore Marina Bay Sands, Cartier in Nanjing MixC City Mall, Van Cleef & Arpels in Auckland and San Francisco, in addition to the opening of the Korean flagship store in Seoul. Investments in store renovations included the Cartier flagship boutiques in New York Fifth Avenue and Paris 13 Paix. As a result, operating margin reached 37.1%.
Richemont Luxury New Retail (‘LNR’) partners
The agreement for Farfetch and Alabbar to acquire 47.5% and 3.2% of YNAP, respectively, leaving Richemont holding 49.3%, will realise the luxury group’s long-standing goal of making YNAP a neutral industry-wide platform, with no controlling shareholder. In exchange, Richemont will receive Farfetch shares, expected to represent 12-13% of Farfetch’s issued share capital, to further align interests.
Subject to a number of conditions, including the receipt of certain antitrust approvals, the initial stage of the transaction is expected to complete before the end of calendar year 2023. By that point, Richemont Maisons will adopt Farfetch’s technology to create the best ‘route to market’ and realise their ‘Luxury New Retail’ vision.
Sales at the Specialist Watchmakers, which comprise A. Lange & Söhne, Baume & Mercier, IWC Schaffhausen, Jaeger-LeCoultre, Panerai, Piaget, Roger Dubuis and Vacheron Constantin, were 22% higher than in the prior-year period. Performance was driven by strong direct-to client sales: retail and online retail sales continued to expand sharply, and combined, contributed to 54% of the Specialist Watchmakers sales.
Sales were buoyant in all regions, particularly in the Americas and Europe with all luxury brands reporting higher sales.
Iconic collections continued to drive momentum and included, to name but a few, Lange 1 for A. Lange & Söhne, Riviera for Baume & Mercier, Pilot for IWC, Reverso for Jaeger-LeCoultre, Submersible for Panerai, Polo for Piaget, Excalibur for Roger Dubuis and Overseas and Traditionnelle for Vacheron Constantin.
Solid sales combined with disciplined cost deployment resulted in a € 506 million operating result, up by 35%. As a result, operating margin rose
by 240 basis points to 24.8%. New store openings during the period included A. Lange & Söhne in Boston, IWC in Dubai Mall and Panerai in Zürich while investments in store renovation included, amongst others, Vacheron Constantin at Dubai Mall.
Other’ includes the Fashion & Accessories Maisons, Watchfinder, the Group’s watch component manufacturing and real estate activities, amongst others.
Sales rose by 27% for the period or by 24% excluding the impact of Delvaux, acquired in June 2021. All channels and regions posted growth, with a particular mention for the Americas and the Middle East & Africa. Nearly all Maisons recorded strong growth, with Delvaux and Peter Millar – including G/FORE – being particularly noteworthy.
Alaïa sales grew sharply, benefiting from a renewed creative vision. Montblanc’s growth was supported by demand for its Meisterstück writing instruments collection and the launch of the Extreme leather goods collection while Chloé continued its growth momentum, sustained by the unveiled Fall-Winter 2022-2023 collection.
Operating profit grew by 33%, leading to an operating margin of 4.3%. Excluding a real estate transaction in the prior-year period, operating profit would have grown by triple digits.
Store investments included the renovated Alaïa boutique in Dubai Mall, the Delvaux store in Paris St Honoré and the Montblanc flagship store in Paris Champs Elysées as well as new stores for Chloé in Shanghai Kerry Center Mall, Delvaux in Dubai Mall and Peter Millar in Charlotte Philipps Place, North Carolina.