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Richemont sales jump 23%

Johannesburg - Swiss based luxury goods group Richemont [JSE:CFR] on Monday reported total sales in the quarter ended December 2010 increased by 23% at constant exchange rates.

Excluding the acquisition of NET-A-PORTER.COM and at constant exchange rates, sales rose by 19%, it said.

Executive chairperson and group CEO Johann Rupert said Richemont's Maisons performed well and saw good sales growth, particularly at the retail level, during the three-month period.

"Sales in the month of December grew by 17% at constant exchange rates and excluding the impact of the NET-A-PORTER.COM acquisition," he said.

"As indicated previously, higher comparative figures will make the final quarter of the financial year endingMarch 31 2011 more challenging. Gross margin is anticipated to be negatively affected by a stronger Swiss franc given the group's Swiss manufacturing base and by the planned changes to product lines at one of the group's Specialist Watchmakers, which will be largely implemented during the coming quarter."

Richemont noted that sales in Europe were significantly higher than the comparative period, partly due to the impact of the acquisition of NET-A-PORTER.COM. The growth of sales in Asia-Pacific reflects a continuation of the Maisons' expansion in that fast- growing region.

The Americas continued to report strong growth, helped by the impact of NET-A-PORTER.COM. Sales in Japan continued to grow at a low rate in yen terms.

In terms of sales by distribution channel, the high rate of retail sales growth partly reflected the acquisition of NET-A-PORTER.COM. Excluding that business, retail sales increased in the third quarter by 23% at constant exchange rates.

Demand for the group's products was broad-based, with all business areas reporting double-digit sales growth.

"This demonstrated our Maisons' strong position in jewellery, fine watchmaking and premium accessories. The very high rate of growth reported in 'Other' reflects the acquisition of NET-A-PORTER.COM," the company said.

The group's net cash position at end December 2010 amounted to €2.2bn compared with €1.4bn a year ago. Linked to this position, it is anticipated that the strength of the Swiss franc will result in higher non-cash financial charges for the year, the group said.

The group's results for the current financial year will be announced on Thursday, 19 May and its AGM will be held in Geneva on Wednesday, September 7.
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