Story Highlight
– Richemont’s Specialist Watchmakers grew sales to €1.7 billion.
– Vacheron Constantin and Jaeger-LeCoultre led the growth.
– Sales growth varied by region, with Americas strong.
– Specialist Watchmakers’ profitability remains a challenge at 8.8%.
– Richemont’s share price dropped 6% on growth slowdown.
Full Story
Richemont has reported positive growth for its Specialist Watchmakers, despite ongoing challenges within the industry. In an update concerning its financial performance for the first half of the fiscal year ending in September, the luxury goods conglomerate highlighted that brands such as Vacheron Constantin, Jaeger-LeCoultre, and A. Lange & Söhne have been instrumental in driving this growth. Notably, Cartier is excluded from this category.
The Specialist Watchmakers division achieved sales of €1.7 billion, reflecting a 10% increase at constant currency compared to the previous year. Growth appears to be gaining momentum, accelerating from 10% in the first quarter to 12% in the second quarter.
While demand in China is reported as subdued and the Asia Pacific region remains stable, other areas, particularly the Americas and Japan, have shown robust double-digit growth.
However, profitability remains a concern for the watch division. Richemont’s Jewellery Maisons generated a significant operating profit of €3.2 billion, achieving a margin of 35%, while the Specialist Watchmakers reported a much smaller profit of €150 million with a margin of only 8.8%.
Overall, Richemont Group’s total sales reached €12.3 billion for the first half, marking a 17% increase at constant exchange rates. This growth slowed in the second quarter, dipping from 20% to 13%, which subsequently affected investor confidence, leading to a 6% drop in the company’s share price during early trading.
Moreover, the company noted a positive trend across all sales channels in the first half, particularly in retail and online sectors. Direct-to-client sales have now risen to 78%, reflecting a 2% increase compared to the previous year.
In its midyear report, Richemont also mentioned significant board changes, including the promotion of Anton Rupert, son of group chairman Johan Rupert, to the role of non-executive co-deputy chairman. He will serve alongside Bram Schot, who has held the position since 2024. Richemont stated, “This appointment is an important step in our long-term succession planning and reflects our commitment to sound governance.”
