Richemont, the owner of luxury brands such as Cartier, Montblanc and Chloé today announced a 14 per cent drop in operating profits as its chairman declared the market ‘volatile’.
Watch sales are in decline but Brexit resulted in growth, the Swiss luxury goods group revealed in its first year results.
Overall sales for the financial year ending March 31 dropped four per cent from last year to €10.6bn (£9bn), as its operating profits also fell to €1.76bn.
The group’s 46 per cent dive in net profit to €1.21bn was largely attributed to the merger between its subsidiary Net-A-Porter with Italian-owned YOOX.
Jewellery is in, watches are out
Cartier and Van Cleef & Arpels jewellery sales offset a weak performance in watches.
Richemont limited the decline in jewellery sales to just two per cent, but sales of luxury watches dropped sharply by 11 per cent year-on-year.
Brands including Montblanc and Swiss watchmakers Vacheron Constantin and IWC Schaffhausen accounted for just €2.8m of the group’s sales.
There were positive signs for the struggling luxury market as Richemont claimed that the growth rate in sales in the UK went into the double digits following the EU referendum.
Savvy shoppers were obviously keen to make the most of the fall in the pound.
Sales in the Americas also bounced back and increased by two per cent on last year to €1.78bn, thanks to Americans buying up jewellery, leather goods, and clothing.
However Richemont’s chairman, Johann Rupert, was keen to warn us that the market is still unstable.
Rupert said: “Volatility and uncertainty in the geopolitical and trading environments are likely to prevail.”