Luxury sector in “privileged position”, Richemont chairman says
Luxury group Richemont has reported full-year sales of just over €14.2 billion for the period ending March 31, an increase of 2% year on year.
The group pointed out that it was only in the fourth quarter of its business year that it began to feel the effects of the covid-19 crisis; in that final quarter, its sales declined by 18% and in key markets in Asia, its revenues declined by much more.
Overall, its revenues in Asia were down by 36%, but the figure for China was a fall of 67%.
Richemont chairman, Johann Rupert, said he hoped the pandemic would prove to be a “once-in-a-lifetime event”, but he claimed that the luxury goods industry is in a privileged position.
“Hard luxury products are not transient but rather embody centuries of heritage and craft skills,” he said. “Cartier was established in 1847 and has survived two world wars; Vacheron Constantin began manufacturing watches at its current premises in Geneva in 1755. Our maisons will survive these difficult times, supported by the strength of Richemont’s balance sheet.”
Mr Rupert went on to say that there will certainly be “headwinds” in the months ahead for the group’s brands and others in the luxury sector. He pointed out that the luxury industry is dependent on customers’ willingness to spend and that the “feel-good factor” that buying luxury products can bring for those who can afford them is one of the reasons the industry has enjoyed strong growth in recent years. Part of this, however, has come from increased international travel, which is largely now on hold.
However, he said there were already signs of improvement, saying that since Richemont’s 462 boutiques in China have re-opened, following restrictions imposed to slow the spread of covid-19, the group has seen “strong demand” once again.
