Jewelry and Watches Contribute to Richemont's Rise in Third-Quarter Sales

-- JCK-Jewelers Circular Keystone, 1/25/2007 11:34:00 AM

Richemont, the Swiss luxury goods group, on Tuesday reported that third-quarter sales increased by 10 percent at actual exchange rates compared to same period of the prior year. At constant exchange rates, sales increased by 15 percent.

Jewelry sales were up 8 percent for the period, ended Dec. 31. Cartier and Van Cleef & Arpels reported double-digit growth in sales during the quarter. Both brands reported excellent growth in the Asia-Pacific region and in the United States.

Watch sales increased by 13 percent for the period. All of the Group’s specialist watchmakers reported double-digit sales growth, led by Panerai, A. Lange & Söhne, IWC, and Jaeger-LeCoultre.

Other business segments for the three-month period are as follows:

* Writing instrument, Montblanc and Montegrappa, up 13 percent
* Leather and accessories, Alfred Dunhill and Lancel, up 1 percent
* Other businesses, which includes Chloé smaller brands, and watch component manufacturing activities for third parties, up 29 percent

The third quarter saw a slower rate of sales growth compared to the 18 percent reported during the first six months, the company said. This was in part due to lower growth in wholesale sales. The brands maintained double-digit growth overall and sales in newer markets such as Russia continued to grow strongly.

Cumulative sales for the nine-month period to 31 December 2006 increased by 13 percent at actual exchange rates to $5 billion. At constant exchange rates, sales increased by 17 percent.

At constant rates, sales in the Americas continued to grow at a high rate during the quarter, in line with the first six months, the company said. At actual exchange rates, sales grew at 11 percent, reflecting the further weakening of the dollar against the euro during the period. Consumer confidence and demand for the Group’s products remained at high levels with Cartier and Van Cleef & Arpels both delivering excellent performances.

The company said outstanding performance in the Asia-Pacific region during the first half of the year continued during the third quarter, with the development of the market in mainland China, the second largest market in the region, contributing significantly.

The 6 percent growth in local currency sales in Japan was more than offset by the further, marked weakening of the yen during December, the company said. Although the excellent performance was seen in the same period last year set a very tough basis for comparison for the jewelry brands, the Group’s underlying sales continued to grow, with excellent performances by the specialist watchmakers and Montblanc.

During the period, the Group’s retail sales increased by 14 percent at actual exchange rates. Wholesale sales increased by 7 percent.

Richemont, Geneva, owns a portfolio of leading international luxury brands, which are managed independently. In addition to its luxury goods business, Richemont holds an 18.9 percent interest in British American Tobacco.