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Asia Recovery Boosts Cartier, Van Cleef

Nov 12, 2017 7:53 AM   By Rapaport News
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Richemont saw a sharp rise in jewelry sales in the first fiscal half-year as Asian consumer demand recovered, the luxury group reported Friday.

Revenue from jewelry maisons — which include jewelry and watch sales at Cartier and Van Cleef & Arpels — jumped 15% to $3.69 billion (EUR 3.16 billion) in the six months ending September 30, the Geneva-based company said. Both of those brands recorded “double-digit growth,” with strong performances across both jewelry and watches, it added. Profit from the segment surged 30% to $1.14 billion (EUR 981 million).

Jewelry sales alone increased 12% to $2.55 billion (EUR 2.19 billion), and watch sales — including by the maisons and Richemont’s specialist watchmakers — grew 14% to $2.78 billion (EUR 2.29 billion). 

The improvement owed in part to weak numbers last year, when Cartier and the specialist watchmakers bought back watch inventory from overstocked clients. Almost two thirds of those buybacks occurred in Asia, chief financial officer Burkhart Grund said in an investor conference Friday, transcribed by Seeking Alpha.

Richemont’s Asian sales last year suffered from the “overextension of the gifting business in China,” meaning that when demand slowed, companies to which it had supplied goods found themselves with more inventory than they could sell, Grund explained.

While jewelry and watches are Richemont's largest business units, the company also has leather goods, clothing and writing-instrument divisions.

The group’s total sales increased 10% to $6.54 billion (EUR 5.61 billion), driven by a 23% leap in Asia Pacific to $2.54 billion (EUR 2.18 billion). Sales in the Americas grew 8% to $1.04 billion (EUR 890 million), and in Europe, they climbed 2% to $1.89 billion (EUR 1.62 billion).

Group profit soared 80% to $1.14 billion (EUR 974 million), reflecting the improved sales.

Image: John Wisniewski
Tags: americas, asia, asia pacific, Burkhart Grund, buybacks, Cartier, China, Jewelry, Piaget, Rapaport News, retail, Richemont, Roger Dubuis, Van Cleef & Arpels, watches
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