Retail helped create growth
In its past fiscal year (which ended on 31 March), Richemont managed a 10.65 billion euro turnover, 5 % higher than the year before and even 10 % higher when exchange rate fluctuations are ignored. Profit grew 3 % to 2.07 billion euro, as a strong turnover increase for jewelry (Cartier, Van Cleef & Arpels and others grew 4 %) offset the drop in turnover for the fashion and accessory brands (Alfred Dunhill, Chloé and Lancel).
The most remarkable fact is that Richemont mainly grew through its own chain of boutiques, which have now reached 1,056 ‘Maisons’ – 42 more than the previous year. These are mostly located in tourist locations and the retail stores now represent 55 % of the group’s turnover.
40 % of Richemont’s turnover came from Hong Kong and China, while Asian turnover grew 6 % overall. The region EMEA (Europe, the Middle East and Africa) grew 11 % and now produces 37 % of the group’s total turnover. North and South American also had double-digit turnover growth (+14 % growth and 15 % of the group’s total turnover), while Japan had a 23 % turnover increase and represents 8 % of the group’s total turnover.
“Bottom reached 2 years ago”
The group is satisfied with the results, even though the Swiss company had been used to double-digit turnover growth up until 2 years ago. Ever since the strict Chinese anti-corruption laws, the luxury sales have dropped tremendously, especially for prestigious watch brands like the ones Richemont has.
According to co-CEO Richard Lepeu, that type of “gift” for politicians and business men used to represent 20 to 30 % of that region’s turnover. “If you look at our Chinese performance from that angle, we have not performed too badly“, a vision his co-CEO Bernard Fornas shares. “I think we have reached the bottom. The worst was two years ago, but the market is finding its footing once more.”
