Jewelry Stands Out at Richemont

RAPAPORT… Richemont’s jewelry sales outperformed the rest of the group in the three months ending September 30 as Chinese demand grew and consumers spent money online.

Sales at jewelry maisons — Cartier, Van Cleef & Arpels, and Buccellati — increased 4% year on year for the company’s second fiscal quarter, Richemont reported Friday. That compared with a 5% drop for the group as a whole.

“Jewelry now represents the largest product category for the group by far, at 41% of sales,” said Burkhart Grund, Richemont’s chief financial officer, in an earnings call following the results.

Revenue from the jewelry maisons declined 18% year on year to EUR 3.06 billion ($3.64 billion) in the first fiscal half ending September 30, reflecting weakness in markets outside Asia Pacific and the Middle East and Africa. Sales in those two regions strengthened, with especially sharp growth in China, while online revenue saw a triple-digit percentage increase.

Total jewelry sales — at all store brands across the group — fell 15% to EUR 2.25 billion ($2.68 billion) for the half year. That excludes sales of watches and other products at Cartier, Van Cleef & Arpels, and Buccellati.

Richemont also announced an investment in luxury online retail platform Farfetch, which it has made in partnership with Chinese e-commerce giant Alibaba. Richemont and Alibaba will each buy $300 million in private convertible notes that Farfetch has issued, as well as investing $250 million each in Farfetch China.

Image: A Cartier logo on a building in Chengdu, China, April 2018. (Shutterstock)