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Currency changes hit luxury group Richemont

AFP · 12 Sep 2013, 13:43

Published: 12 Sep 2013 13:43 GMT+02:00

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From April to August, Richemont saw its sales grow just four percent at actual exchange rates and nine percent at constant rates, the company said in a statement issued on Thursday.
Those numbers were at the low end of what analysts polled by the AWP financial agency had expected, with forecasts ranging from three to nine percent growth at constant rates and between eight and 12 percent in local currencies.
Following the announcement, which was made ahead of Richemont's annual general meeting, the company saw its share price slump 3.58 percent to 90.10 francs a piece in midday trading compared to a drop of just 0.28 percent for the Swiss stock exchange's main index.

The world's second largest luxury goods group, which owns the Cartier, Piaget, Jaeger-LeCoultre and Montblanc brands among others, is very sensitive to currency movements and was especially hard-hit by variations in dollar and yen values against the euro.

In Japan, for instance, Richemont saw its revenues soar 17 percent in the local currency but drop eight percent in euros.
In the Asia-Pacific region, the company's sales meanwhile slowed significantly, climbing only one percent compared to the year-ago period.
Strong sales in Hong Kong and Macau were resolutely offset by dwindling sales in mainland China, "largely reflecting a prudent consumer sentiment after several years of exceptional expansion," Richemont said.
In Europe and the Middle East, sales remained strong, boosted by a steady stream of visitors to major tourist destinations, while growth in Americas climbed amid strong demand for jewellery, it said.
Across all regions, Richemont's jewellery brands meanwhile saw a clear slowing of sales growth to just 2.0 percent, down from a 23 percent during the year-ago period.
Observers. meanwhile, hailed the company's nine-percent hike in watch sales at actual exchange rates.
This was a "positive surprise," said J. Safra Sarasin analyst Patrick Hasenboehler, pointing out that this was "well above" the 1.1-percent overall increase in Swiss watch exports during the first seven months of the year.
Richemont is set to publish its half year results on November 8th.

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