Luxury Richemont posts surprisingly strong growth in the Christmas quarter
The Swiss luxury goods group Richemont clearly increased its sales in the Christmas quarter. This significantly exceeded market expectations. The jewelry business performed extremely well, and things were less bad in Asia than recently.
16.01.2025, 07:14
16.01.2025, 08:42
SDA
In the third quarter of 2024/25 (as at the end of December), sales rose by 10 percent year-on-year to 6.15 billion euros, as Richemont announced on Thursday. In local currencies, sales also increased by 10 percent. Analysts had expected organic growth to fall by 0.7 percent on average. They had only expected sales of 5.59 billion euros.
According to Richemont, this was the strongest quarter ever in terms of sales. The regions of North and South America (+22%), Europe (+19%), the Middle East and Africa (+21%) and Japan (+19%) recorded double-digit growth. And the decline in the largest region, Asia-Pacific (-7%), slowed - despite continued weak demand in China.
In mainland China, Hong Kong and Macau, sales also fell by 18%. Most other Asian markets grew, including double-digit growth in Korea.
Watch segment shrinks more slowly
Looking at the divisions, the jewelry business with the flagship brand Cartier remained strong (+14% to EUR 4.50 billion), while the watch business with brands such as IWC faltered (-8% to 867 million). According to Richemont, there was an improvement in all business areas from October to December compared to the first half of 2024. At -17%, watch sales fell even more sharply in the first half of the year.
The Group's four jewelry houses - Buccellati, Cartier, Van Cleef & Arpels and Vhernier - benefited from new products, which were particularly successful during the festive season, it added. The strongest contribution to growth came from America and Europe.
The "Other" segment, which includes fashion, accessories and leather goods, grew by 11 percent to 782 million euros.
All sales channels grow
Overall, all of Richemont's distribution channels recorded an increase in sales, with the retail trade (+11%) accounting for over 70% of sales. Online retail sales (+18%) accounted for only around 7%.
With the strong third quarter, sales in the first nine months of 2024/25 increased by 3% to EUR 16.2 billion. In local currencies, this represents an increase of 4 percent. However, Richemont also referred to ongoing investments.
The Group's net liquidity reached 7.9 billion at the end of December, compared to 6.8 billion at the end of 2023.
YNAP is history
The online subsidiary YNAP is still classified as a discontinued operation in the accounts. At the beginning of October, Richemont announced the sale of YNAP to the Munich-based platform Mytheresa after a long search for a buyer and the failed Farfetch deal. The Geneva-based company is taking a stake in the buyer, but also had to write off around 1.2 billion. The deal is expected to be completed in the first half of 2025, at which point Richemont will hold a 33% stake in Mytheresa, according to earlier information.
The YNAP digital platform sells clothing and accessories from well-known luxury brands such as Bottega Veneta, Dolce&Gabbana and Gucci. Sales in this area fell by 14 percent in the third quarter of 2024/25 and by 15 percent in the first nine months.
Richemont does not publish profit figures for the third quarter. As usual, Richemont also did not provide an outlook for the full year 2024/25.
