Just days before the upscale SIHH trade fair opens its doors in Geneva, Swiss luxury conglomerate Richemont – which has all its brands exhibiting at the fair – has just announced its results for the third quarter ended December 31, with the numbers continuing a positive trend.
The group’s overall performance was strong, with third quarter revenue rising 7% at constant exchange rates. Sales in the Asia Pacific rose 11%, driven mainly by demand in China, Korea, Hong Kong and Macau. Also noteworthy was the 8% rise in revenue from the Americas.
Sales at Richemont’s own stores, otherwise known as retail sales, rose 13% globally. But wholesale, meaning sales to third party retailers or distributors, showed a mixed performance. Wholesale revenue fell 3%, due to cuts in the distribution network as well as trimming of inventory in retail partners. While wholesale in Asia Pacific rose, it declined in other markets.
The starkest difference lay between the performance of Richemont’s jewellery division – the majority of which is Cartier, followed by Van Cleef & Arpels – and its watch brands, which include A. Lange & Söhne, IWC and Panerai.
Jewellery sales rose 11%; most of which was done through Richemont’s own retail network. The watch brands, on the other hand, rely largely on third party partners, and saw sales rise just 1%. Although retail sales for watch brands rose, they fell in wholesale.
Richemont’s watch brands will no doubt work to fix the soft numbers, but in a varying number of ways, from aggressively priced entry-level watches to new management (which is the case for Panerai). All will be revealed once SIHH 2018 opens it doors on January 15.
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