Richemont just released their latest sales update, and they essentially beat everyone’s estimates. The Switzerland-based luxury goods holding company owns brands such as A. Lange & Söhne, Baume & Mercier, Cartier, IWC Schaffhausen, Jaeger-LeCoultre, Montblanc, Officine Panerai, Piaget and Vacheron Constantin.
Important is that Richemont not only holds a strong number of watch brands, but a few of the most iconic jewellery brands the universe has ever known. And it so happens, that jewellery had a great ride, and watches didn’t do too bad either.
The pandemic has not been too terrible to the luxury goods industries, so an increase in sales is nothing surprising. However, it is impressive to see Richemont post better sales than the last ‘normal’ quarter before the pandemic struck (Q4 2019). In fact, they absolutely crushed those numbers.
The strongest performance can be attributed to the jewellery business area (a.o. Cartier, Buccellati and Van Cleef & Arpels ). The watches category certainly also had a nice run (25%) compared to last year. Looking at the different regions, America lead the charge in demand and a strong rebound in Europe helped as well.
More important than all of that is perhaps the strong continued change in their go-to-market strategy. Direct sales to consumers now represent 78% of all group sales! Great news for Richemont, not so great news for their wholesale customers.
Highlights from the report:
Compared to the third quarter ended 31 December 2020:
• Strong sales, up by 32% at constant exchange rates and by 35% at actual exchange rates
• Double-digit sales growth across all regions, channels and business areas
• Strongest performance from the Americas and Europe, rebalancing regional sales mix
• Retail and online retail, a combined 78% of Group sales, driving growth
• Jewellery Maisons, with sales growth of 38% at constant exchange rates (+41% at actual exchange rates). Fashion & Accessories Maisons, with sales growth of 37% at constant exchange rates (+40% at actual exchange rates), sustained by Chloé, Montblanc and Peter Millar. Specialist Watchmakers, with sales growth of 25% at constant exchange rates (+29% at actual exchange rates)
Compared to the third quarter ended 31 December 2019:
• Continued sequential quarterly growth acceleration, with third quarter sales up by 38% at constant exchange rates and 36% at actual exchange rates
• Pre-pandemic levels substantially exceeded, with sales up double digits across all regions and business areas, as well as online and offline retail channels
• Outstanding performance of the Americas, Asia Pacific and Middle East and Africa; Europe and Japan
resuming growth, up double digits
• Performance led by the Jewellery Maisons (+57% and +55% at constant and actual rates respectively) with other business areas growing at or close to 20%