Luxury goods group Richemont, the owner of online retailer Net-A-Porter, has reported a modest increase in sales for the third quarter of the fiscal year. Sales were up by 1% compared to the same period last year, but when adjusted for exchange rates, the increase was 5%. Despite the challenging global environment, the company experienced strong sales growth in the Asia Pacific and Middle East and Africa regions, which offset declines in the Americas and Europe.

The company’s online retail sales saw significant growth in the double digits, while its retail sales only experienced single-digit growth. This helped offset the lower wholesale sales. Notably, the company’s Jewellery Maisons performed exceptionally well, indicating that consumers were still willing to invest in high-end jewelry. However, other business areas, including fashion operations, reported stable or lower performances.

When delving deeper into the numbers, Richemont’s total sales for the quarter reached €4.186 billion. Jewelry maisons saw a 9% increase in sales, while specialist watchmakers experienced a 7% decline. The company’s online distributors, such as Yoox and Net-A-Porter, had flat sales, and its fashion operations saw a significant 16% drop. These performances were influenced by factors such as interrupted tourist flows and store closures.

Richemont’s sales growth was primarily driven by a strong performance in the Asia Pacific region, particularly in mainland China and Taiwan. Europe saw a significant decline in sales due to reduced tourism and store closures. The Americas witnessed modest sales growth, mainly supported by domestic sales. The Middle East and Africa region experienced an impressive 27% increase in sales, attributed to both domestic and tourist spending. Sales in Japan saw a slight increase before public health measures were implemented.

The third-quarter performance of Richemont reflects the challenges and disparities faced by the luxury sector during the pandemic. While segments like high-end jewelry continue to thrive, others like fashion have struggled. The company’s online retail sales have provided some stability in these uncertain times. However, the continuously volatile environment poses ongoing challenges for the industry as a whole.

Useful links:
https://www.reuters.com/article/idUSKBN2A500O
https://www.bloomberg.com/news/articles/2021-02-14/richemont-ceo-sees-new-global-boom-as-wealthy-spawn-bloomberg