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Investors cheer Richemont sales jump

Cape Town - Luxury goods group Richemont [JSE:CFR] on Wednesday announced that its sales for the five months ended August 31 increased by 4% at constant exchange rates.

At actual exchange rates, sales rose by 16%, the group said ahead of its annual general meeting in Geneva later on Wednesday.

Investors reacted positively to the results, sending the share price up almost 7% on European markets and much of the same on the JSE, where the sahre price was up 6.67% to R106.18.

The group, which is chaired by South African billionaire Johann Rupert, said it was positively impacted by the weakening of the euro against the dollar and related currencies, as well as the strong performance of the Maisons’ boutiques.

"The Cartier and Van Cleef & Arpels Maisons performed exceptionally well in a volatile environment," said Richemont.

Sales performance was mixed at constant exchange rates, with double-digit increases in Europe and Japan offsetting decreases in Asia Pacific and soft demand in the Americas and the Middle East, according to a group statement.

European sales benefitted from good tourist numbers, helped by the weakness of the euro against the dollar and other currencies. In the Asia Pacific region, sales in Hong Kong and Macau were significantly lower.

Mainland China resumed growth with retail sales growing at a strong double-digit rate, overcoming lower wholesale demand. Other markets in the region saw positive developments, Richemont said, but sales growth in the Americas was subdued, supported by high jewellery, fashion and accessories and e-commerce. Japan enjoyed strong momentum, both from local and tourist demand, helped by a weak yen.

READ: Rupert positive despite Richemont challenges

Retail was strong overall, according to the group, with many Maisons reporting double-digit growth supported by strong jewellery and Leather sales. In their own boutiques, the Jewellery Maisons also reported growth in watch sales.

The specialist watchmakers suffered from weak demand in the Asia Pacific region, however, offsetting good momentum elsewhere.

"Richemont’s other businesses reported good growth overall, with the negative impact on sales from ongoing reorganisations at Alfred Dunhill and Lancel being more than counterbalanced by the positive performances at Montblanc, Chloé and Peter Millar," the groupd said.
 
"Of particular note was the high growth in sales through the Maisons’ own boutiques in Europe and Japan. The marked decrease in wholesale sales reflected the negative trend in the Asia Pacific region, where the environment continues to be extremely challenging," the group said.

The group also said the agreement to merge the Net-A-Porter Group with YOOX S.p.A - announced in March 2015 - is expected to be completed in October 2015.

Richemont’s interim results for the six-month period to September 30 2015 will be released on November 6 2015.

ALSO READ: SA's most powerful businessman, Johann Rupert, on Apple, the Ashes and more

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