Richemont Group reports declining sales in Asia Pacific
World’s second largest luxury conglomerate, Swiss based Richemont Group reports flat sales at constant exchange rates (sales increased at 4 % at actual rates) in the quarter to 31 st December 2014. Growth in Europe/Middle East and the Americas was offset by a significant decline in Asia Pacific. Overall, third quarter trading was below the first six months of the year.
In Asia Pacific, the decline in sales reflected an unfavorable basis of comparison and a difficult trading environment in most markets, primarily in Hong Kong and Macau.European sales benefitted from strong domestic sales and a return of visitors in the main tourist destinations, helped by favorable exchange rates.
The Americas region continued to report good growth, albeit at a slower pace than in the first six-month period. Sales were particularly driven by jewellery and the Net-a-Porter Group.
Soft domestic demand in Japan partly reflected the continued impact of the surge in purchases made ahead of the April 2014 sales tax increase. That surge led to a 47 % sales increase in the final quarter of the comparative financial year.
The period’s overall performance reflected demand for jewellery, particularly through the retail channel. Retail continued to outperform the wholesale channel. Retail sales were supported by selective store openings, jewellery sales and Net-a-Porter.
The Jewellery Maisons reported satisfactory sales growth in their own boutique networks. The retail network performance benefitted from jewellery sales in particular.
The decline in sales by the Group’s Specialist Watchmakers reflected both caution on the part of business partners in the wholesale channel and a lower performance of some retail locations, most notably in Hong Kong and Macau.
The Group’s net cash position at 31 December 2014 amounted to € 4.9 billion (2013: € 4.3 billion).