Sunday, June 9, 2024

Richemont chairman dismisses reports of takeover by LVMH

Geneva – Consumers’ penchant for tried-and-tested classics propelled Richemont to a record-breaking year, prompting its chairman to shoot down speculation that the luxury group is up for sale.


The Geneva-based company said on Friday that revenue for the year ended March 31 hit an all-time high of €19.95 billion ($21.82 billion), up 19 per cent from a year earlier (14 per cent at constant exchange rates).Operating profit rose 34 per cent to €5.03 billion ($5.50 billion).


Following the release of the company’s full-year results, chairman Johann Rupert publicly refuted a report in a Swiss newspaper in February that the company was a takeover target for rival LVMH.

According to the Financial Times, he said that Richemont was not for sale. He said he speaks regularly with LVMH chairman Bernard Arnault and that the two companies “respect each other’s independence”.
Rupert also said Richemont had rejected a deal proposed by bankers to merge with Kering two years ago.

During the financial year, the company’s jewellery brands – Cartier, Van Cleef & Arpels and Buccellati – posted sales growth of 21 per cent (16 per cent at constant exchange rates).

Richemont said the brands’ “iconic” collections outperformed: “Opera Tulle” and “Macri” at Buccellati, “Trinity”, “Panthère” and “Santos” at Cartier, and “Alhambra”, “Perlée” and “Fauna” at Van Cleef & Arpels.

During the year, Richemont reopened the Cartier flagship boutiques on Fifth Avenue in New York and in Paris, and opened a new Van Cleef & Arpels flagship store in San Francisco.Sales of Richemont’s watch brands, which include Vacheron Constantin, IWC and Jaeger-LeCoultre, increased by 13% (8% at constant exchange rates).

As with jewellery, sales of classic collections such as the Riviera for Baume & Mercier, pilot’s watches for IWC, the Reverso for Jaeger-LeCoultre and the Overseas for Vacheron Constantin drove watch sales.During the year, a new Jaeger-LeCoultre flagship store was opened in Beverly Hills, California.

Regionally, Richemont’s sales in the Americas held up well, growing 27 percent year-on-year, with strong comparables (89 percent sales growth) from the previous financial year.

The Americas are Richemont’s second largest market.

Richemont said sales in the Americas slowed in the second half of the year, partly because Americans shopped overseas due to the strong US dollar, while sales in its largest market, Asia Pacific, gained momentum as the Chinese government eased COVID restrictions.In terms of distribution channels, Richemont saw growth across the board, with sales in its own stores up 22%, online sales up 12% and wholesale sales up 14%.

Looking ahead to the new financial year, Rupert said in the company’s full-year results statemen that he expected conditions to remain unsettled.”Economic volatility and political uncertainty are likely to remain features of the trading environment,” he said. “The group will therefore seek to maintain the necessary agility to manage fluctuating levels of demand.

“I am confident that our Maisons are well positioned to meet strong demand, driven in particular by a significant resumption of Chinese travel. Richemont is fortunate to have such a unique portfolio of Maisons with excellent long-term prospects”.

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