Satisfactory financials for Richemont Group for fiscal 2014
World’s second largest luxury group, Richemont reports satisfactory financial results for the year ending 31 March 2014, with 5 % sales growth to € 10,6 billion and operating profit in line with the prior year at € 2,4 billion. Operating margin for the group was down to 22.7 %, primarily reflecting unfavourable exchange rate effects. Profit for the year was up by 3 % to € 2,06 billion, including currency hedging gains.
Sales by business area were divided as follows : 51% Jewellery Maisons, 28% Specialist watchmakers, 7% Montblanc and 17% other businesses. Montblanc reported a decline in sales of 5% from € 766 million in 2013 to € 730 million in 2014, mainly due to unfavourable currency effects and soft sales across product categories and geographies, particularly in mainland China.
Although it registered a slight increase in sales to € 1,49 billion, Richemont’s fashion and retail division reported an operating loss of €80 million. The division includes: Lancel, Alaia, Alfred Dunhill, Shanghai Tang, Chloe, Peter Millar and online retailer Net-A-Porter.
Europe accounted for 37 % of overall sales for the group. Following the previous year’s high comparative growth, sales in the region
moderated to a high single-digit rate.
Sales in the Asia Pacific region accounted for 40 % of the Group total, with Hong Kong and mainland China the two largest markets. The overall rate of growth during the year marginally improved. Sales growth in Hong Kong and Macau was satisfactory, whereas sales in mainland China were below the prior year’s level. The decrease in mainland China reflected the performance in the wholesale channel. Korea and Australia enjoyed strong double-digit growth.
The Americas region, which accounted for 15 % of Group sales, posted an accelerated growth (+14%) compared to the prior year,
primarily driven by domestic demand. Sales growth in Japan was robust, benefiting from strong domestic consumption. The significant increase partly stemmed from the impact of the yen’s devaluation compared to other currencies as well as advanced purchasing decisions towards the Group’s financial year-end, linked to sales tax changes. The yen’s devaluation boosted inbound tourism to Japan and discouraged outbound travel by Japanese customers.