Luxury group Richemont, known for its prestigious brands including Chloé, Alaïa, Cartier, Van Cleef & Arpels, and Jaeger-LeCoultre, has recently released its fiscal year results for the period spanning from March 2020 to 2021. Despite facing challenges due to the closure of physical stores, suspension of manufacturing operations, and a decline in international tourism, the group managed to limit its performance decline to -8%.
Throughout the fiscal year, Richemont experienced an 8% decrease in revenue, reaching €13.14 billion. In the first half of the year, the group recorded a significant decline of 25% at constant exchange rates. However, as certain regions of the global economy began recovering, the second half witnessed more encouraging results, with a growth rate of 17%. The fourth quarter of the fiscal year, January to March 2021, showed particularly robust growth at 36%. The report released by Richemont suggests that this positive momentum is set to continue in the upcoming weeks, with a notable acceleration in April.
Richemont has successfully capitalized on its investments in digital and e-retail, which proved particularly beneficial during the pandemic. In November, the group injected €253 million into Farfetch convertible bonds and later formed a tripartite partnership with Chinese e-commerce giant Alibaba. Their efforts paid off, with Cartier becoming the best-selling brand on Alibaba’s Luxury Pavilion last year.
Online retail sales experienced a 6% increase at actual exchange rates during the fiscal year and now contribute to 21% of the group’s consolidated revenue. Richemont attributes this growth to their digital development, stating that nearly three-quarters of sales result from direct engagement with customers. This emphasis on digital connectivity has allowed the brand to benefit from increased interactions with customers and boost retail sales.
Richemont’s jewelry brands emerged as strong drivers of growth, surpassing pre-pandemic levels with an impressive operating margin of 31%. The Asia-Pacific region, particularly mainland China, has been a promising market for the luxury group. Sales in this region now make up 45% of Richemont’s total sales, aligning with the trends seen in other leading luxury brands such as LVMH, Kering, and Hermès.
Overall, Richemont’s fiscal year results indicate resilience and adaptation in the face of challenging circumstances. The group’s investments in digital transformation, the success of its jewelry brands, and the growth in the Chinese market have played significant roles in its performance. As the global economy continues to recover, Richemont aims to build on its current positive momentum and further expand its presence in the luxury market.
Useful links:
– Richemont: As Chinese buyers return, Group expects strong H2 rebound
– Richemont Results: Drunk on Jewelry
