Jewellery helps Richemont sales jump amid post-pandemic luxury revival

Strong demand for its jewellery and watches in the Americas and Europe in a post-pandemic rebound helped quarterly sales at Cartier owner Richemont rise by nearly a third, the world’s second-largest luxury group said on Wednesday.

Sales at Richemont rose to 5.658 billion euros ($6.41 billion) in the company’s third quarter ended December, a 32% increase when currency swings were removed. The performance was 38% better than the 2019 Christmas quarter before the pandemic hit, Richemont said in a statement.

Shares, slightly down so far this year following a 71% jump last year, climbed 5.7% in early trading after the better-than-expected sales.

Demand for luxury goods has rebounded strongly from the worst troughs of the coronavirus pandemic – Italy’s Prada and Britain’s Burberry (BRBY.L) also posted strong numbers this week – and Richemont benefits from its exposure to the fast-growing jewellery category. 

High-end watch sales also recovered last year, with Swiss watch exports overall slightly above 2019 levels at the end of November.

Sales at Richemont jewellery brands Cartier, Buccellati and Van Cleef & Arpels were up 38%, while specialist watchmaker sales, including IWC and Vacheron Constantin brands, rose 25% versus the year-ago period.

The Americas posted the strongest growth – 55% – followed by Europe with 42%. China, which had already recovered from the worst of the pandemic the previous year, only saw 7% growth, Richemont said.

Analysts applauded the better-than-expected sales figures, highlighting the jewellery category, the rebound in Europe and the strong increase in retail sales in the group’s own stores.

To boost sales and margins, Richemont is moving away from wholesale towards directly operated stores and online channels. Direct sales to consumers further increased, now representing 78% of group sales, and online retail sales were also up 19%, Richemont said.

“Richemont has made significant improvements at all levels and is currently in a sweet spot to create value,” Vontobel’s Jean-Philippe Bertschy said, reiterating his ‘buy’ recommendation on the stock.

Peer LVMH (LVMH.PA), owner of the Bulgari and Tiffany jewellery brands, is due to post full-year results on Jan 27. Swatch Group (UHR.S) results are also expected around that date.

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