Highest Quarterly Sales in the Company’s History Despite China Continuing to Lag
Richemont, the parent company of Chloé, Cartier, Van Cleef & Arpels, and Vacheron Constantin, closed the three months ending Dec. 31 with a 10 percent sales increase, netting 6.2 billion euros. The sales figures were reportedly the highest quarterly sales in company history. Nonetheless, stagnated demand in China stood out as all other regions recorded double-digit gains.
Dubbing the period as “very solid,” the company reported that all categories, with the exception of watches, saw double-digit rises in the third quarter. The jewelry division, consisting of Buccellati, Vhernier, and others, posted a 14 percent sales increase, up from a 12 percent increase in the corresponding period last year. This increase owed to contributions from both new designs and established collections.
However, not all segments were as roaringly successful. The Asia-Pacific region went against the general trend of sales growth at the specialist watchmaking division. Nevertheless, double-digit increases in the Americas, and Middle East and Africa regions managed to ameliorate this, reducing the overall sales decline to 8 percent from 16 percent in H1.
The group’s “other” business area, including fashion and accessories, recorded an 11 percent sales rise with double-digit growth from Watchfinder & Co., a specialist in pre-owned watches. Fashion and accessories brands saw their sales increase by 7 percent, thanks to “continued progress” at Alaïa and Peter Millar, and the contributions of Gianvito Rossi, consolidated in Feb 2024.
Aside from Asia Pacific, which contracted by 7 percent due to an 18 percent decline in Mainland China, Hong Kong, and Macau, all regions demonstrated double-digit growth. Other Asian markets saw their performance improve, with the majority of countries recording positive results and double-digit growth in Korea. Both tourists and locals drove Japanese sales, leading to a 19 percent sales increase.
In Europe, sales rose by 19 percent, bolstered by increased domestic demand and tourist spending, predominantly from North American and Middle Eastern customers. Main European nations all reported rise in sales, with “notable performances” in France, Switzerland, and Italy.
The Americas saw a sales increase of 22 percent as a result of strong local demand, with all business areas recording increases. Similarly, sales in the Middle East and Africa rose by 20 percent, led by the UAE and higher tourist spending.
Bernstein’s Luca Solca commended the results, emphasizing that Richemont’s performance in the quarter was “significantly ahead” of analysts’ expectations. Furthermore, Jefferies praised the gains in jewelry as “remarkable” and identified post-election confidence as the driver behind the bounce in the Americas. Commenting on Richemont’s position, Jefferies stated that it “remains the liquid, high-beta luxury name of choice”, due to its strong performance and newfound willingness to tackle underperforming brands under a new management structure, despite challenges in watches.
