Swiss firm takes hit despite Brexit boost

Swiss luxury goods giant Richemont, which owns top global brands like Cartier, warned on Wednesday that weak demand and restructuring costs would slash first-half profits despite a boost in UK sales from Brexit.

Swiss firm takes hit despite Brexit boost
Richemont owns brands including Vacheron Constantin. Photo: Richard Juilliard/AFP

The world's second-biggest luxury group forecast operating profit 45 percent lower at the end of September, which concludes the first half of its 2016-17 fiscal year, compared to the same period last year.
Sales plummeted 14 percent during the first five months of the fiscal year, which Richemont put down to “the challenging comparative figures in 2015, the repurchase of slow-moving watch inventory and the difficult global environment.”
One-time restructuring costs of 65 million euros ($73 million) will also dent profits during the six-month period, the firm said.
“We are of the view that the current negative environment as a whole is unlikely to reverse in the short term,” it cautioned.
European sales plunged 20 percent, dragged down especially by France, which saw far fewer tourists than usual following several deadly terrorist attacks.
The picture was rosier on the other side of the channel, with Britain showing swelling sales since its referendum at the end of June dented the value of the pound, making luxury goods there less expensive for foreign visitors.
In the Asia-Pacific region, another key market for the group, sales contracted 12 percent amid particularly weak demand in Hong Kong and Macau, forcing the company to buy back excess stock.
Japan also reported significantly lower sales compared to high figures last year, while the strength of the yen depressed tourist spending in the country, Richemont said.
The company, which also holds such brands as Piaget, Jaeger LeCoultre and Van Cleef & Arpels, meanwhile hailed overall sales growth in mainland China and South Korea.
And it said “positive momentum” in jewellery and accessories in the Americas had been offset by weak demand for watches, pushing overall sales down eight percent.
Following the news, Richemont saw its share price slump four percent in mid-morning trading, to 57.40 Swiss francs, while the Swiss stock exchange's main SMI index inched up 0.1 percent.

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Geneva: rare pink diamond aims to make $50 million

The Pink Legacy, an exceptionally large pink diamond, is set to go under the hammer at Christie's in Geneva on Tuesday, when it is expected to bring in up to $50 million.

Geneva: rare pink diamond aims to make $50 million
Christie's have refused to say who the current owner of the Pink Legacy is. Photo: AFP

At nearly 19 carats, the vividly coloured gem is extraordinary, Jean-Marc Lunel, an international jewellery specialist at Christie's, told AFP.

“If you consider that most pink diamonds weigh less than a carat, it is really something,” he said.

Read also: Marie Antoinette's exquisite jewels up for auction in Geneva

The gem, which on November 13th will be offered at auction for the first time, has been estimated at between $30 million and $50 million (€26.5-€44.1 million), and Lunel suggested it could hit the high end of that range.

“It is probably the most beautiful (specimen) ever presented at public auction,” he said, insisting there was good reason to expect the rock to snatch an extraordinary price.

The Pink Legacy is said to have been discovered in a South African mine around a century ago. Photo: AFP

The rectangular-cut diamond has been graded “fancy vivid” – the highest possible grade of colour intensity.

Christie's pointed out that in the salesroom, fancy vivid pink diamonds over 10 carats are “virtually unheard of” and that only four vivid pink diamonds or over 10 carats have ever been offered for sale at auction.

One of them, the nearly 15-carat Pink Promise, was sold last November at a Christie's auction in Hong Kong for $32.5 million. That amounts to $2.176 million per carat, which remains the world auction record price per carat for any pink diamond.

And in 2013, a huge pink diamond weighing 59.60 carats meanwhile went under the hammer at Sotheby's for $83 million, or $1.39 million per carat.

The Pink Legacy, set to headline Christie's annual Magnificent Jewels auction on Tuesday, used to belong to the Oppenheimer family, which for decades ran the De Beers diamond mining company, but Christie's refused to say who the current owner was.

It was discovered in a South African mine around a century ago, Lunel said.

“It was probably cut in the 1920s,” he said, adding that it had not been altered since.

The classic rectangular cut is traditionally used for white stones, but is rare for pink diamonds.

“Imagine a domino that you have cut the corners off of,” Lunel said, pointing out that the cut is a “classical so-called emerald cut”, which stands out from the typical, more rounded, multi-facetted cuts used today.

Rahul Kadakia, Christie's international head of jewellery, meanwhile said in a statement in September that he expected The Pink Legacy to “cause immense excitement with collectors and connoisseurs of diamonds around the world”.

“Its exceptional provenance will no doubt propel it into a class of its own as one of the world's greatest diamonds.”