Yoox Net-A-Porter acquisition boosts Richemont sales
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Richemont sales in Asia Pacific surged 20 per cent in the first half of this year with the region the group’s single-largest market, accounting for 37 per cent of total sales.
The increase was fuelled by the inclusion of the Yoox Net-A-Porter (YNAP) business into the Swiss-headquartered multibrand luxury retailers figures for the first time. Excluding YNAP and Uk online retailer Watchfinder, sales rose 14 per cent, driven by a net 20 new store openings and “high single-digit growth” in Mainland China and double-digit growth in Hong Kong, Macau and Korea.
“Both the retail and wholesale channels saw double-digit growth, with strong performances in jewellery and watch sales,” the company said in a statement.
In Japan, a 14 per cent growth in sales was driven by higher domestic and tourist spending, which benefited from a comparatively weaker yen. Excluding online distributors, sales in the region increased by 8 per cent, led by a double-digit growth in watch sales and the net opening of five directly operated boutiques. Japan represents 8 per cent of overall sales.
Group-wide global sales rose by 21 per cent at actual exchange rates to €6.808 billion and by 24 per cent at constant exchange rates. Online retail sales, now reported separately following the e-commerce acquisitions, amounted to 14 per cent of group sales.
Excluding YNAP and Watchfinder, sales rose by 6 per cent at actual exchange rates and by 8 per cent at constant exchange rates.
“Both the retail and wholesale channels saw double-digit growth, with strong performances in jewellery and watch sales,”
Operating profit of €1.130 billion was down €36 million due to acquisition and disposal-related charges of €159 million, the company said. Excluding the impact of first-time consolidation of YNAP and Watchfinder, operating margin improved to 21.1 per cent. Profit for the period rose to €2.253 million primarily due to a post-tax non-cash gain of €1.378 billion on the revaluation of YNAP shares held prior to buy-out.
Chairman Johann Rupert said offline Richemont sales growth was primarily driven by strong performance of the jewellery maisons and double-digit increases in the maisons’ directly operated boutiques and online stores.
“Robust retail sales in jewellery and watches more than offset a 2 per cent decline in wholesale sales, which was mainly due to the specialist watchmakers’ ongoing prudent inventory management and upgrade of the wholesale distribution network,” said Rupert.
“In our jewellery maisons, watch sales grew strongly in Cartier’s stores, benefiting from the successful Panthere and relaunched Santos collections. Jewellery pieces continued to outperform, notably with the iconic Cartier Love and Van Cleef & Arpels Alhambra collections.”
He said while growth was muted for specialist watchmakers, retail was strong and there was good momentum at Vacheron Constantin, Roger Dubuis and JaegerLeCoultre.
Questions & Answers
Q.What proportion of Richemont's total sales does the Asia Pacific region now contribute?
What proportion of Richemont's total sales does the Asia Pacific region now contribute?
The Asia Pacific region has become Richemont’s single-largest market. It accounts for 37 per cent of the group's total sales after a 20 per cent surge in the first half of this year.
Q.How much did Richemont's online retail sales represent as a percentage of group sales?
How much did Richemont's online retail sales represent as a percentage of group sales?
Following the e-commerce acquisitions, online retail sales are now reported separately. They amounted to 14 per cent of Richemont's total group sales during the reporting period.
Q.What was the main reason for the decrease in Richemont's operating profit?
What was the main reason for the decrease in Richemont's operating profit?
Operating profit was down by €36 million due to significant acquisition and disposal-related charges. These charges, amounting to €159 million, impacted the reported profit figure.
Q.Why did Richemont's profit for the period rise despite the fall in operating profit?
Why did Richemont's profit for the period rise despite the fall in operating profit?
Profit for the period increased primarily due to a substantial post-tax non-cash gain. This gain of €1.378 billion resulted from the revaluation of YNAP shares held before the full buy-out.
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