The Swiss luxury goods group, Richemont, has posted a 19% decline in sales for its leather and textiles division to Eur174 for the six months ended September 2003. Operating profit fell 5% to Eur40 million.

The firm, which is the second largest luxury goods group in the world, suffered an overall 14% decline in revenues to Eur1.52 billion and a 56% slump in operating profit to Eur81 million. Net profits decreased 49% to Eur68 million while earnings per share fell 28% to 51.04 cents.

Sales during the first two months of the period were the most severely affected - down 27% overall and 41% in the Asia-Pacific region. The company blamed the war in Iraq, the SARS virus and the strong Euro. In the following four months, however, the trend reversed and revenues climbed 4%.

Looking forward, Richemont’s executive chairman, Johann Rupert, remains positive, stating: “The six month period has been one of the most difficult in Richemont’s history. However, we are now seeing some positive signs in terms of the current trading environment. Sales in October have continued to show modest growth of 1%. We have seen good double-digit growth in the Asia-Pacific region, the Americas and the Middle East, although Japan and Europe remain difficult. It appears that the worst problems that the luxury goods world has faced in recent months may be behind us.”

Rupert added that the company is committed to re-establishing its Alfred Dunhill brand as a leading global supplier of leather, clothing and accessories for men. He said the change of emphasis to extend wholesale distribution, as opposed to focusing on Dunhill’s own retail outlets, is moving ahead with five agreements signed in Europe and one with Saks for distribution in stores across the US.

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