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Business News: Richemont Posts Strong Recovery; Watches Continue Decline
After a weak first half, Richemont’s business started its turnaround in the second half of the financial year, which ended in March 2021. From a 25% year-on-year revenue decline in the first half at constant exchange rates, the Swiss luxury group enjoyed a 36% rise in sales in the last quarter. As a result, revenue for the full year was down just 5% compared to the year before, to slightly over €13 billion. The healthy numbers and positive outlook helped send Richemont shares past 100 Swiss francs during trading, a five-year high. Divergent fates Beneath the strong recovery in the group’s numbers lay a recurring theme: a disparity in performance between regions, channels, and divisions. This echoes that of its rivals and the broader luxury-good industry – characterised by a strong recovery in Asia, moderate recovery in the United States, and continued weakness in Europe. And within the group, Cartier and Van Cleef & Arpels are powering ahead, leaving most of its watchmakers lagging. Continuing a trend that began in the third quarter, sales in Asia Pacific – all Asian countries except Japan – rose by a staggering 106% in the final quarter, boosting revenue in the region by 22% for the year. Asia Pacific sales are now the largest proportion of Richemont’s revenue at 45% of the total, compared to the historical one-third share. The performance was driven by strong sales in China, both in Richemont’s physical stores and its online mall on Alibaba’s Tmall Lu...
