Richemont Jewelry Sales +4% Provides Cautious Outlook

Annual sales by luxury retailer Richemont increased by 2 percent to €5.42 billion. However, that did not prevent a 31 percent decrease in net profit to €1.08 billion in the fiscal year ended March 31.

Jewelry sales of €2.76 billion were up 4 percent over the previous year.

The overall 2 percent sales increase reflected 10 percent growth during the first six months of the year, followed by a 5 percent sales decline during the second half of the year. The decline was primarily the result of the global economic slowdown, the group said.

Jewelry brand Cartier reported a record year in sales and profitability. High jewelry sales, which are made exclusively through Cartier’s 172 boutiques, were particularly strong, together with sales of high end jewelry watches and Ballon bleu, the company said, without providing specific figures.

Sales of other products were “broadly” in line with the prior year. Van Cleef & Arpels reported good sales growth, albeit from a significantly lower base. Operating profit for the entire jewelry group increased by 2 percent to €777 million.

Operating margin for the jewelry group was 1 percentage point lower at 28 percent.

In his outlook, executive chairman Johann Rupert said sales in April were 19 percent lower than April 2008. “There are currently very few encouraging signs in the global economic picture. The U.S. market is very weak, and conditions in Japan have been poor for some time,” Rupert said.

“Most European markets are unsettled and trading remains hesitant. The Asia-Pacific region and the Middle East continue to report some positive sales trends,” he added, saying trading conditions through September 2009 would be “very challenging indeed.”