E-commerce lifts Richemont as it names veteran Jérôme Lambert as new CEO
The luxury goods group has also announced strong sales growth, thanks largely to recently acquired online retailers YNAP and Watchfinder
Richemont’s e-commerce strategy bore impressive results in the five months to end-August as the company continued to reposition itself for changing consumer habits.
The world’s second-largest luxury goods company reported a 25% increase in sales on constant exchange rates (22% at actual exchange rates), benefiting mostly from its operations in the Americas, Europe and the Asia Pacific region.
Isolating the contribution of newly acquired online retailers Yoox-Net-A-Porter Group (YNAP) and Watchfinder.co.uk, Richemont’s sales increased 10% at constant exchange rates and 7% at actual exchange rates. The two online distributors contributed €720m to the group’s total sales.
Luxury brands have been reluctant to sell online, with some saying that a digital platform cannot provide the exclusive service that their customers have become accustomed to in boutiques. Most of them refused to work with Amazon just two years ago.
In the Richemont stable the Cartier brand has, however, always been an anomaly, having sold jewellery online in the US since 2010.
But since 2017, Richemont has made a giant e-commerce leap. In 2017, it bought a stake in travel retailer Dufry.
It completed the takeover of YNAP earlier in 2018. While the company previously held a 49% interest in YNAP, a complete takeover, coupled with the 100% acquisition of Watchfinder, has made Richemont a major player in luxury e-commerce.
In its 2018 annual report, the group made further commitments to develop a robust omni-channel offering, especially to capture millennial customers.
It announced the appointment of Jérôme Lambert as CEO on Monday. He will spearhead the group’s initiatives to meet “changing consumer habits”.
Lambert, who held various positions in Richemont before his appointment as the group COO in 2017, will oversee the new online distributors, specialist watchmakers and Richemont’s basket of other businesses, including Alfred Dunhill, Azzedine Alaïa, Chloé, Montblanc and Peter Milla.
Excluding the new online distributors’ contribution, Richemont’s retail sales increased 14%, driven mostly by its jewellery (up 14%) and watches businesses (up 4%).
The wholesale business continued to struggle, with sales declining 1% after accounting for changes in the exchange rate. It increased 2% on a constant exchange rate basis.