Richemont Annual Sales Up 10%

The luxury conglomerate Compagnie Financiere Richemont SA said Thursday that its sales increased by 10 percent to 8.3 billion for the year, ended March 31. It also released more details on a plan to separate its luxury and tobacco assets.

The Zurich, Switzerland-based company—whose holdings include Cartier, Van Cleef & Arpels, Vacheron Constantin, Baume & Mercier, and Jaeger-LeCoultre—said good growth seen during the early part of the year continued in the fourth quarter.

Operating profit from the luxury goods businesses increased by 21 percent to 1.7 billion, the company said. Cash generated by the group’s luxury goods operations was $1.5 million.

Net profit, including the group’s share of the results of British American Tobacco, increased by 18 percent to $2.4 billion. Excluding the impact of non-recurring items in both years, net profit increased by 17 percent to $2.4 million.

Restructuring Proposal. In November 2007, Richemont announced that it was studying plans which might lead to a separation of its luxury goods operations from its other interests, which include its investment in British American Tobacco plc.

On Thursday, the company said a review of its business resulted in the development of proposals that would see Richemont separated into two entities: a luxury business, headquartered in Switzerland, and an investment vehicle, which it is currently proposed should be based in Luxembourg and structured as an investment fund. Given the complexity of the overhaul, it still isn’t clear how fast and to what extent the plan will be implemented, Richemont said.

Richemont said in November it was weighing a spinoff of its BAT stake in anticipation of the elimination of Luxembourg 1929 holding companies at the end of 2010. Richemont SA, the group’s principal holding entity, currently benefits from the 1929 holding company status, as does the joint venture vehicle used by Richemont and Remgro Limited to hold the BAT interest.

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