Going online boosts Richemont’s sales but not its profit
More than half of the group’s sales and 90% of its operating profit came from its jewellery maisons
Richemont’s interim profit more than doubled thanks to the luxury goods group booking a €1.4bn “equity-accounted investment” profit on turning Yoox Net-a-Porter (YNAP) into a wholly owned subsidiary.
Interim revenue for the six months to end-September grew 21% to €6.8bn, Richemont said in its interim results released on Friday morning.
The accounting profit on delisting YNAP from the Milan stock exchange sent the group’s net profit soaring to €2.25bn from €974m.
Following its acquisitions of “e-tailers” YNAP and Watchfinder, Richemont now segments itself into traditional retail, which contributed 52% of total sales; online retail, which contributed 14%; and wholesale, which contributed 34%.
“During the past six months, Richemont strengthened its portfolio with two strategic investments aimed at offering our discerning and globally dispersed clientele more options in how, when and where they engage with and purchase from our maisons,” chair Johann Rupert said in the results statement.
While e-commerce has grown to contribute 14% of Richemont’s top line, its online businesses contributed a €115m operating loss to the group.
What Richemont terms its jewellery maisons contributed more than half of the group’s sales and 90% of its operating profit.
“In our jewellery maisons, watch sales grew strongly in Cartier’s stores, benefiting from the successful Panthère and relaunched Santos collections. Jewellery pieces continued to outperform, notably with the iconic Cartier Love and Van Cleef and Arpels Alhambra collections,” Rupert said.
Its specialist watchmakers brands contributed 23% of sales and 22% of operating profit.
Richemont’s “other” division — which houses its fountain pen brand Montblanc, its fashion and accessories businesses, watch component manufacturing and its real estate activities — contributed 14% of sales but a €46m operating loss.
Geographically, Richemont splits itself into five regions. The largest is Asia-Pacific, which contributed 37% of the group’s total sales; followed by Europe, which contributed 30%; Americas with 18%; Japan with 8%; and Middle East and Africa with 6%.
“Excluding online distributors, all regions with the exception of Middle East and Africa enjoyed higher sales, with notable double-digit increases in Hong Kong, Korea and the US,” Rupert said.
The group’s policy is to pay only a final dividend, not an interim dividend.