Cartier maker Richemont sees 39% higher profit in pandemic year
08:13, 21 May 2021
Swiss group Richemont, the owner of luxury jewellery brand Cartier, recorded a net profit of €1.29bn ($1.84bn) in the financial year ended on 31 March 2021, 38% higher than in the previous year. The group reported that overall sales were down 5% year-on-year but that jewellery sales were higher than in the pre-pandemic period.
As a result, the company decided to double the dividends paid to shareholders to CHF2 ($2.22) per share, after it halved dividends last year amid the uncertainty caused by the pandemic. The price of Richemont shares increased by over 5% on the Swiss Exchange following the announcement, briefly touching an historic high of CHF 100.
Strong growth in Asia and online
The Geneva-based Richemont recorded €13.14bn sales in the 2021 financial year, down 5% at constant exchange rates (-8% at constant exchange rates) compared to the previous year. The revenues were negatively influenced by the worldwide lockdown at the beginning of the pandemic, which led to a 25% drop in sales (at constant exchange rates) in the first half of the financial year. However, sales recovered strongly in the fourth quarter, when they surged by 36% at constant exchange rates.
Full-year sales in the Asia Pacific region grew by double digits, underpinned by strong sales in mainland China, where Richemont’s brands are well represented. At the same time, online, mobile and distant shopping were key growth drivers. “We have seen a sharp increase in clients favouring those channels. Higher online retail sales, benefiting from triple-digit growth at our Maisons, partially offset lower retail and wholesale sales,” Richemont chairman Johann Rupert commented.
Demand for luxury jewellery unaffected by pandemic
Richemont’s Jewellery Maisons posted higher sales, exceeding pre-Covid levels. “A solid 31% operating margin underlined the enduring appeal of Cartier, Van Cleef & Arpels and Buccellati. We are pleased with the leadership positions of Cartier and Van Cleef & Arpels as well as with the international expansion of Buccellati which is progressing well,” a spokesman for the company said.
The Specialist Watchmakers division recorded a double-digit sales increase in the Asia Pacific region. The growth was boosted by the opening of five flagship stores on Alibaba Tmall Luxury Pavilion and the company’s participation in Watches & Wonders fairs in Shanghai and Sanya. This only partially offset the contraction in other regions, however. Richemont’s Specialist Watchmakers include brands such as Piaget and Vacheron Constantin.