Richemont in lift as watch sales thrive

SWISS luxury goods group Richemont’s five-month sales jumped 37 per cent, beating forecasts and confirming a rebound in the sector as wealthy Asians splash out again on luxury watches and jewellery.

Richemont, normally cautious in its outlook, said yesterday net profit for its first half to September should be significantly higher than last year.

However, Richemont, which produces mainly in Switzerland, said it would also be hurt by exchange rates, given the surge in the Swiss franc against the euro – its reporting currency – and the dollar.

“The improved trading environment is certainly welcomed. However, it is far too soon to draw any conclusions about the sustainability of the economic recovery,” chairman and chief executive Johann Rupert said.

Peers like Swatch and LVMH have also reported double-digit growth in watch and jewellery sales in the first half and Swiss watch exports rose almost 20 per cent between January and July, after the worst slump in decades.

Richemont shares have risen almost seven per cent this month, hitting a two-month high earlier this week.

“Provided the macroeconomic outlook does not deteriorate ahead of the key Christmas period we believe the company could deliver a stronger than expected margin recovery in the next couple of years,” Citi analyst Thomas Chauvet said.