Luxury keeps on growing

The US-China trade war, anti-government protests in Hong Kong, China's sluggish growth, Britain's exit from the European Union, the Democrats' plan to tax America's biggest fortunes nothing, it seems, can dent the optimism of luxury companies, or at least French luxury companies which remain in rude health Richemont's chairman Johann Rupert, a man otherwise known for his reserve, was equally upbeat about the group's six-month results to end September, announced on November 8th: "The strength of our balance sheet, our financial discipline, and the agility, creativity and skills of our teams position us well for the long term." A statement it would be difficult to contradict, in particular where the group's balance sheet is concerned, with equity two and a half times greater than long-term debt and a net cash position of almost €2 billion Richemont's sales for the period under review progressed 9% to €74 billion.

Operating profit increased 3% to €1.2 billion with operating margin at +15.7% Excluding a post-tax non-cash gain on the revaluation of the Yoox Net-A-Porter shares held prior to buyout, profit remained broadly stable at €869 million Closer analysis shows that most of this growth and profit came from the group's jewellery Maisons whose sales grew 8% with an operating margin comfortably in excess of +32%.

In contrast, sales by specialist watchmakers barely progressed, with a margin in the region of +18% As expected, the situation in Hong Kong, the main market for Swiss watches, was reflected by the more than 10% contraction in revenue in this special administrative region, which accounted for 8% of total sales compared with 11% one year previous The multinational could also decide to bid for Tiffany, currently in the sights of LVMH.

Further mixed results came from the group's online distributors Their sales spiked 31% to €1.2 billion but this was coupled with a 69% increase in operating losses to €194 million. . Source