Luxury goods maker Richemont sees no short-term relief. April sales plunged 18%.
The saying usually goes: during the rough times the rich are 'largely' unaffected while the poorest are hit hardest. But given the 18 percent plunge in Richemont's April sales, this adage may be tested. The group founded by South African businessman Johann Rupert doesn't see any short-term relief either, after reporting an 18 percent decline in April sales. The stock which is listed on both the Swiss and Johannesburg securities exchange has come under pressure, showing a near 15 percent decline since the start of the year on the Swiss exchange. – Stuart Lowman
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(Bloomberg) — Richemont, the maker of Cartier jewelry and IWC Schaffhausen timepieces, said it doesn't expect the market for luxury goods to improve in the short-term after sales plunged 18 percent in April.
Revenue rose 6 percent to 11.1 billion euros ($12.4 billion) in the 12 months through March, the Geneva-based company said in a statement Friday. That matched analysts' forecasts. Operating profit fell to 2.06 billion euros, missing the average analyst estimate of 2.29 billion euros.
The company, whose full name is Cie. Financiere Richemont SA, has been struggling with the strong franc and is cutting almost 100 jobs in its Swiss watchmaking operations. Aside from weak demand in Asia, Richemont is also affected by a slowdown in tourism to Europe following the Paris terror attacks in November, a trend that analysts say may extend after the bombings in Brussels in March.
Last year, the company had a 239 million-euro mark-to-market loss in the first half. The non-cash losses reflected the euro's plunge, which caused changes in the market value on money and hedging instruments.
Co-Chief Executive Officer Bernard Fornas retired at the end of March, leaving Richard Lepeu as sole CEO.