Luxury conglomerate Richemont has reported strong growth in the first quarter of the year, with positive results in Europe, Japan, the Americas, and the Middle East. However, the company faced challenges in the Asia Pacific region, particularly China, due to Covid restrictions. This trend was similar to that experienced by Burberry, another luxury brand, which also reported a pattern of sales.

Richemont, which owns several high-end brands including Chloé, Cartier, and Dunhill, achieved an overall sales growth of 12% at constant exchange rates and 20% on a reported basis, amounting to €5.264 billion. Although China presented difficulties, the company performed exceptionally well in the US, where it became the largest single market.

The retail sector was the main driver of Richemont’s global growth, now accounting for 58% of group sales compared to 55% in the previous year. The company experienced sales growth across all channels and business areas, both at constant and actual exchange rates.

The Jewellery Maisons segment saw a 20% growth in sales at actual exchange rates (12% at constant rates), while Specialist Watchmakers grew by 18% at actual exchange rates (10% at constant rates). The Online Distributors division, which includes Yoox Net-a-Porter, saw an 8% increase at actual exchange rates (2% at constant rates). The Other business area, which encompasses the company’s fashion operations, experienced significant progress with a 36% growth at actual exchange rates (28% at constant rates). This segment benefited from strong retail and wholesale sales, with sustained demand across most of Richemont’s brands and regions.

Europe generated €1.29 billion in sales, a substantial increase of 42% at constant exchange rates. On the other hand, Asia-Pacific saw a decline of 15% with sales totaling €1.78 billion. The Americas experienced a 25% rise, reaching €1.344 billion, while Japan saw a remarkable increase of 83% to €421 million. The Middle East/Africa region also performed well with a 6% growth, reaching €429 million.

Richemont attributed its success in Europe to robust domestic demand and increased tourist spending, particularly from American and Middle Eastern clients. Sales experienced strong growth across various markets, with exceptional triple-digit growth in France.

Sales in mainland China declined by 37% for the quarter, but this decline eased to 12% in June as restrictions were gradually lifted. The company noted that strong momentum in other Asian markets, such as Australia, Singapore, South Korea, and Thailand, partially offset the sales decline in the region.

In the Americas, sales increased by 25%, driven by strong domestic spending, despite challenging comparisons to the previous year.

Regarding distribution channels, retail sales grew by 18% at constant exchange rates, surpassing €3 billion. Online retail also showed growth, rising 5% to €910 million. Wholesale and royalty income increased by 4% to €1.3 billion.

Overall, Richemont’s performance in the first quarter showcased its resilience and ability to navigate challenging market conditions. The company’s focus on retail and its diverse portfolio of luxury brands have proven to be successful in driving growth, particularly in Europe and the Americas. While facing challenges in China, Richemont has capitalized on opportunities in other Asian markets. With its strong financial performance, the company is well-positioned for future success in the luxury industry.

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