×

We've got news for you.

Register on BusinessLIVE at no cost to receive newsletters, read exclusive articles & more.
Register now
Picture: BLOOMBERG
Picture: BLOOMBERG

Richemont had its fastest holiday-season sales growth in at least a decade and Burberry forecast 35% earnings growth this year, signalling that the luxury-goods market is thriving again.  

Richemont said revenue climbed 32% at constant currencies in the last quarter, exceeding pre-pandemic levels as consumers splurged on Cartier jewels and Chloe fashion. Burberry has a bit further to go to recover to 2019 levels, though it said sales accelerated as the British maker of trench coats sold more products at full prices. 

Demand for jewellery, timepieces and fashion items is rebounding as vaccination rates across the world increase and people socialise and travel more. Prada said on Tuesday its sales recovered to above levels seen before the coronavirus pandemic. 

Richemont shares rose as much as 9.3%, while Burberry gained as much as 6.5%.

Jewellery was Richemont’s best-performing unit, though fashion, accessories and leather goods have also been improving, a sign that turnaround efforts have been gaining traction at brands such as Chloe and Montblanc. 

While the Swiss company’s Asia-Pacific sales beat estimates, investors may be surprised that the increase in China, a key market for luxury, was only 7%. Revenue in that market had soared 80% in the year-earlier period. 

China was the first market to recover in the luxury-goods industry, so it is a bit of a calendar effect. However, recent lockdowns as the country pursues its zero-Covid-19 strategy are set to weigh on consumption.

Burberry’s comparable store sales grew 7% in the three months to Christmas, beating analysts’ estimates. Outerwear and leather goods performed well as the brand said it attracted younger consumers. The UK company is undergoing a transition period with incoming CEO Jonathan Akeroyd set to take the helm on April 1. 

Akeroyd’s predecessor, Marco Gobbetti, sought to make Burberry more premium by reducing third-party distribution as well as discounts to sell its Olympia handbags and tartan scarves at full prices. Those sales continued to grow at double-digit percentage from two years ago.

CFO Julie Brown said the Americas region had a “standout” performance, driven by male customers, demand for sneakers and outerwear. Full-price comparable sales in that area were 72% higher than the period in 2019.

Burberry said comparable stores sales in Asia Pacific were flat during the period compared to two years ago.

For more stories like this go to bloomberg.com

Bloomberg News

subscribe

Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.