Swiss luxury group Richemont on Friday reported a 52% increase in net profit to €1.08 billion for the six months to September, as buoyant demand for high-end goods in Europe by Asian tourists continued to be a boom. Richemont also announced on Friday that Johann Rupert would step down as CEO at the end of March. The CEO role will be shared by current deputy CEO Richard Lepeu and Bernard Fornas, who will leave his position as head of Cartier.
Richemont’s sales grew 21% to €5.11bn, or 12% excluding currency shifts. “Sales growth rates moderated, as evidenced by the October sales which grew by 12% at actual exchange rates. At constant exchange rates, they were 7% higher. Richemont is seeing good growth in Europe, supported by Asian tourism which is compensating for slower domestic Asia Pacific sales,” the Geneva-based company said.
Although concern has been heightened over China’s steady decline in economic activity over the past year and its effect on the luxury goods market, car sales, consumer spending and factory output, data released last week points to some economic recovery in the region.
Richemont is encountering the same challenges highlighted by many similar firms in recent months, Jon Copestake, retail analyst at London’s The Economist Intelligence Unit, said. “Luxury growth is slowing in Asia, after the rapid expansion of recent years. Nonetheless the ‘slowdown’ still reflects 7% sales growth for Richemont, which is mouthwatering compared to the static performance in some markets. Additionally, outbound retail tourism from Asia is also supporting sales growth in Europe.”
Richemont, like LVMH, the group behind brands such as Louis Vuitton, Veuve Clicquot and Fendi has benefited from a tendency among Asian shoppers to snap up luxury trappings when on holiday in Europe, where prices are lower and they can save as much as 47%.
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