There is one CEO and “his” brand emerging from the crisis as a winner so far. It is Jérôme Lambert and Montblanc. Have a look at this official Richemont statement …
The year 2016 definitively is challenging for the entire watch and luxury industry. Figures you see here I see almost everywhere. In some cities / countries sales went down up to 50 % compared to last year due to the lack of tourists and potential buyers, the general bad mood of local buyers and the new severe tax laws in China discouraging Chinese tourist to buy as they did before.
What we see is not discouraging at all, it simply is a cool-down process for an industry that in my eyes grew much to quick in the last years. Less would have been more! I expect the results end of the year to be those of the year 2014. If reached no one needs to panic! The watch industry still is ver healthy and able to handle this …
When you read in the official statement … “thanks to positive performances at Montblanc, Chloé, Azzedine Alaïa and Peter Millar” … Please forget the three other named brands. The growth is due to Montblanc and the enormous power of its CEO Jérôme Lambert.
Have a look and give me your feedback…
RICHEMONT ANNUAL GENERAL MEETING
Compagnie Financière Richemont SA’s Annual General Meeting will be held later today in Geneva.
Ahead of that meeting, the Group announces that its sales for the first five months of the current financial year ended 31 August 2016 decreased by 13% at constant exchange rates and 14% at actual rates. Excluding exceptional watch returns taken back from our multi-brand retail partners, constant currency sales decreased by 10% for the period. The Group also comments on the outlook for the six months ending 30 September 2016.
Following the merger of the Net-A-Porter Group with YOOX S.p.A in October 2015, the figures in the table above exclude The Net-A-Porter Group’s sales in the prior period.
As expected, sales for the five-month period ended 31 August 2016 were below the prior year’s level, reflecting the challenging comparative figures in 2015, the repurchase of slow moving watch inventory and the difficult global environment. Overall currency movements also adversely impacted the Group’s sales.
The following comments on the Group’s underlying performance refer to year-on-year movements at constant exchange rates.
Sales in the United Kingdom have shown growth since the weakening of sterling against most currencies at the end of June following the EU referendum. Elsewhere in Europe, sales were down, particularly in France, due to a significantly lower level of tourist activity. The Americas saw positive momentum in both jewellery and accessories but saw an overall decline in sales due to a weaker performance in watches. In the Asia-Pacific region, growth in mainland China and Korea was more than offset by the continuing weakness of the Hong Kong and Macau markets. The policy of buying back inventory to assist our multi-brand retail partners was primarily focused on these two markets. Japan reported significantly lower sales against very high comparative figures. The strength of the yen also depressed tourist spending in the country, with a noticeable impact on sales. Retail declined overall, primarily due to Europe and Japan. All other regions’ sales declines were low single digits, supported by jewellery and accessories. The marked decrease in wholesale sales reflected the continuing negative trend overall, and the above mentioned watch inventory buy backs.
Richemont’s other businesses, as a whole, reported sales growth, thanks to positive performances at Montblanc, Chloé, Azzedine Alaïa and Peter Millar.
We consider that the difficult trading conditions are likely to continue during September. Operating profit for the six months ending 30 September 2016 is therefore expected to be approximately 45% below the prior year’s level, reflecting the effect of one-off restructuring charges of approximately €65 million, and the additional effect of the product buy-backs.
Consequently, we anticipate profit for the period for the six months ending 30 September 2016 will also be impacted at a broadly similar level to the decline in operating profit. Profit for the period reflects not only the movement in operating profit but also the impact of movements in period-end exchange rates, interest, taxation and discontinued operations and therefore cannot be determined absolutely at this time. The results for the six months ending 30 September 2016 will be announced on 4 November 2016.
We are of the view that the current negative environment as a whole is unlikely to reverse in the short term. However, we remain convinced of the long-term prospects for luxury goods globally, and in particular for watches and jewellery. Richemont is well positioned, with a strong balance sheet and a portfolio of long-established Maisons.