Swiss luxury group Richemont, which owns the Cartier and Van Cleef & Arpels jewellery brands, announced that sales for the year ended March 31, 2017 had dropped by 4 percent year-on-year to $11.65 billion (€10.65 billion) while profit had fallen 46 percent to $1.32 billion (€1.2 billion). The group’s sales of jewellery, leather goods and writing instruments had, however, increased, partly mitigating the losses incurred by the other business groups.

Overall sales for the jewellery “maisons” or brands were down 2 percent to $6.49 billion (€5.93 billion) year-on-year, due to a drop in luxury watch sales. However, good growth in jewellery sales at Cartier and Van Cleef & Arpels partly offset weakness in watch sales, thereby limiting the jewellery maisons’ sales decline to 2 percent. Excluding the exceptional buy-backs, sales would have increased slightly, the company said.

The operating result for the jewellery business group was 11 percent lower than in the prior period, pressured by lower sales and the $165.3 million (€151 million) one-time charges associated with the exceptional inventory buy-backs and capacity adjustments.

Group chairman Johann Rupert observed, “The past year posed challenges for Richemont. The group responded to changes in demand, which particularly affected our watch businesses, and shifting patterns of consumption. The group has addressed those challenges by taking significant measures which, while having weighed on short-term financial performance, will ensure Richemont is well positioned for the future.”

He went on to say, “The second half of the year saw an improvement overall. The US, Richemont’s largest country, resumed growth while Mainland China, now the Group’s second largest country, enjoyed strong growth along with Korea, the United Kingdom and Macau. Excluding exceptional initiatives to improve inventory at our multi-brand retail partners and to optimise certain retail and wholesale locations, the decline in sales would have been contained to 2 percent at constant exchange rates.”

Rupert stated, “Growth in jewellery, leather goods and writing instruments partly mitigated weak wholesale sales which were largely affected by the above mentioned initiatives. Cartier watches, within the Jewellery Maisons, and the specialist watchmakers were impacted by exceptional buy-backs and capacity adjustment measures. Montblanc, Chloé and Peter Millar reported good progress.”

https://www.gemkonnect.com/news/jewellery-sales-increases-help-offset-richemont-sales-profit-drop