Richemont six-month profit down 51%
Richemont Group reports profit plunged during the six months through September, underscoring the challenging times facing luxury companies amid weaker global economic growth.
Richemont said six-month profit was down 51% through September to 540 million euros ($599 million) on sales of EUR5.1 billion ($5.6 billion). Sales decreased by 13 % at actual exchange rates to € 5 086 million and by 12 % at constant exchange rates. Excluding exceptional inventory buy-backs, sales declined by 8 % at constant exchange rates. Operating profit decreased by 43 % to € 798 million after one-time charges of € 249 million.
Sales Richemont’s jewelry division declined by 13% while sales of its watches division fell by 17%.
“Sales and profits for the six-month period ended Sept. 30, 2016 were significantly below the prior year’s level, reflecting the difficult global environment, the exceptional inventory buybacks and challenging comparative figures in the first half of the previous financial year,” said Richemont Chairman Johann Rupert.
Luxury brands across Europe have struggled in recent months, with the trend particularly pronounced in Switzerland, where companies face the difficulty of volatile currency swings and the strong franc. Swiss watch exports have fallen sharply in recent months from prior-year levels.