Richemont announces 67% drop in annual profits – JAPANFM

Zurich, Switzerland – Cartier-based maker Richemont announced a 67% drop in annual profit on Friday and said the impact of the coronavirus could last up to three years despite signs of recovery in China.

Richemont, which also manufactures Piaget, IWC and Vacheron Constantin watches, said its results this year would be penalized by the epidemic, with stores closed and a sense of moderate consumption.

President Johann Rupert said other countries may find it difficult to follow China, the first country hit by the Covid-19 epidemic, and to return to normal.

“No one can say when we will see economic activity normalize,” said Rupert. “We may be considering 12, 24 or 36 months of serious economic consequences.

“It may be too pessimistic, but who knows,” he said after the company offered to cut its dividend in half to preserve liquidity, when it was considering a system of warrants to compensate shareholders.

Economic development is essential for luxury businesses, as people tend to buy expensive watches and jewelry when they feel good about the future.

Rupert, who is known for his unfavorable economic opinions, compared the epidemic to a “tsunami that moves from east to west”.

During the three-month period ending March 31, the company’s sales fell 18%, affected by the pandemic.

It reacted by reducing the production of its watchmaking and jewelry factories and the proposed decline in shareholders.

The second largest luxury group in the world said that net profit for the year at the end of March had dropped by 67% to 931 million euros (1.01 billion dollars), missing the 1.29 billion d euros expected by analysts. Sales increased 2% to € 14.23 billion, according to estimates.

The Swiss company said the drop in profits also reflected the non-recurring after-tax accounting gain of 1.4 billion euros it had last year. Excluding that, profit fell 34%.

Its shares were 2% lower at the start of the session.

The company’s watch brands suffered the brunt of the slowdown, with operating profit down 20% and sales down 4%, although Rupert said the slowdown also reflected the company’s attempts to do not flood the market.

The jewelry was more resilient, with sales increasing 2% and operating profit 7%, as customers purchased necklaces, rings and other items as valuable stores.

Richemont was able to reopen its 462 stores in China, which were now experiencing strong demand.

But Kepler Cheuvreux analyst Jon Cox said the situation is likely to deteriorate in the coming months.

“Mainland China is rebounding, but half of China’s purchases of luxury goods are made when they travel abroad and they do not travel,” he said. “Europe and North America generally remain closed. The next two months are going to be much worse than the last quarter of this year. “

By John Revill; editor: Emelia Sithole-Matarise.

  • REDKEN Spray One United Redken Multi-benefit 25 in 1

    Ideal for: All hair types and all textures. A single product unites us all and sublimates all types of hair thanks to its 25 benefits. Product features: Structure: Revitalizes, Nourishes, Improves control, Fills porosity, Hydrates hair, Detangles, Strengthens, Can be

    € 12.90 € 20.00 -36%

  • Pranarom Essential Oil Annual Tansy 5ml

    Pranarom’s annual Tansy essential oil is also called Blue Chamomile or Chamomile from Morocco, grown throughout Europe, especially in the Mediterranean regions. It was once used by monks. It is a plant with yellow flowers, it is thanks to the distillation of its

    € 22.65

  • Pranarom Essential Oil Annual Tansy 30ml

    Pranarom’s annual Tansy essential oil is also called Blue Chamomile or Chamomile from Morocco, grown throughout Europe, especially in the Mediterranean regions. It was once used by monks. It is a plant with yellow flowers, it is thanks to the distillation of its

    € 128.95

Leave a comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.