Picture: BLOOMBERG
Picture: BLOOMBERG

A 23% surge in luxury watch and jewellery sales in Richemont’s largest market, Asia-Pacific, helped the group return to growth in the first half of its financial year.

Measured in rand, Richemont’s interim sales remained flat at R84bn but its net profit jumped 66% to R14.6bn due to a low base set in the comparative period when it invested heavily in buying back slow-moving stock.

In euros, the luxury brands group’s sales grew 10% to €5.6bn and its profit rose 80% to €974m, the company said in its results statement for the six months to end-September that were released on Friday.

Excluding a one-off charge of €249m in the matching period, profit grew 11%. Richemont got its business units, which it refers to as "maisons", to buy back €249m worth of slow-moving stock in the first half of its 2016 financial year.

"Most markets were in positive territory, led by mainland China, Korea, the UK and notably a return to growth in Hong Kong," Richemont chairman Johann Rupert said in the results statement.

The group also announced a management reshuffle on Friday.

The CEO of Richemont’s subsidiary Montblanc, Jérôme Lambert, has taken the newly created role of group chief operating officer.

"Mr Lambert will be responsible for all maisons other than Cartier and Van Cleef and Arpels. In addition, he will continue to be responsible for the Richemont regional support platforms and central support services, excluding finance, human resources and technology," Richemont said.

Cartier’s international sales director Emmanuel Perrin has been given the newly created role of head of specialist watchmakers distribution.

"Mr Perrin, in his 25 years with the group, has been successful with Van Cleef and Arpels and, most recently, Cartier, in developing partnerships with our wholesale partners. A prime area of focus will be matching supply with end customer demand," Rupert said.

Richemont segments itself into five geographic regions. Its largest region, Asia-Pacific, grew sales by 23% to contribute 39% of the group’s total.

Europe accounted for 29% of overall sales. Sales in the region grew by 3%, partly impacted by the increasing strength of the euro. Performance within the region was characterised by double digit growth in the UK, moderate growth in most major markets and stable sales in France, the results statement said.

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