The first quarter was a generally strong one for luxury giant Richemont with the company saying on Monday that the three months to the end of June saw sales jumping 14% in total to €5.322 billion, or rising 19% on a currency-neutral basis.
But the company stayed cautious in its announcement, simply calling it a “solid start to the year”.
The performance was driven by higher sales across almost all regions and distribution channels and all business areas. Yet the ‘almost all’ is crucial here as – like other big names in luxury – the Americas region proved to be weaker than previously.
However, the group saw a “strong rebound” in Asia Pacific more than offsetting muted sales in the Americas.
Growth was led by its Retail ops, which now account for 68% of group sales, with direct-to-client sales representing 74% of sales.
As for the firm’s divisions, its Jewellery Maisons rose 19% at actual exchange rates, and 24% at constant rates, to €3.599 billion, while the Specialist Watchmakers rose 6% at actual exchange rates to €1.061 billion, or 10% at constant rates.
FASHION STRENGTH
Its Other unit, which includes its fashion and accessories labels such as Chloé, Dunhill and Alaïa, rose 5% at actual exchange rates to €662 million, and 8% at constant rates.
The fashion and accessories labels faced demanding comparatives (+26% during the prior-year period currency-neutral), but were helped by strong retail sales across all its Maisons and most regions, even including in the Americas. Peter Millar’s double-digit sales growth, despite the relative slowdown of the US market and high comparatives, was impressive.
In addition, Montblanc is “starting to benefit from an evolving product offering and a revival in the travel retail channel, Chloé is progressing well in its ‘retailisation’, while Alaïa, Delvaux and Dunhill also posted strong contributions”.
Looking at its regional performance in more detail, revenue in Europe rose 10% at actual rates to reach €1.131 billion. Asia-Pacific was up 32% at €2.239 billion, but the Americas dropped 4% to €1.096 billion. Japan rose 6% to €424 million and the Middle East/Africa was up 12% at €432 million.
By distribution channel, Retail rose 19% to €3.618 billion. Online Retail dropped 1% to €298 billion (although it was up 2% currency-neutral, reflecting “a varied performance among business areas”. The digital pureplay Yoox Net-A-Porter (YNAP), now presented as ‘discontinued operations’, saw a 10% sales fall at actual exchange rates “in a globally challenging environment for digital distribution pure-players”. Meanwhile, wholesale and royalty income was up 8% at €1.406 billion.
CHINA POWERS AHEAD
The performance easily beat what it achieved in the first quarter a year ago and, as mentioned, Asia-Pacific was the reason for this. Favourable prior-year period comparatives, as well as the removal of Covid-related restrictions and the reopening of borders in mainland China, Hong Kong SAR and Macau SAR in January, led to substantial sales increases ranging from double-digit growth in the mainland to triple-digits in the latter two locations.
Sales were solid across other Asian markets, notably in Australia and Taiwan.
In Europe, comparisons were tougher but the performance was still good, “sustained by resilient domestic demand and tourist spending, largely from American, Middle Eastern and, more recently, Chinese clients”.
Most markets, particularly France, Italy and Switzerland, generated higher sales.
In the Americas, the sales contraction “stemmed from lower wholesale sales and retail sales broadly aligned with the prior-year period”.
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