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INDUSTRY NEWS: Richemont Releases Strong Annual Results, Direct-To-Client Sales Dominate Overall
Sales reach an all-time high

Richemont Group owns brands such as A. Lange & Sohne, Officine Panerai, Vacheron Constantin, Roger Dubuis, Cartier, IWC, and Jaeger-LeCoultre. Earlier this morning the Richemont Group posted its Annual results and they were mighty strong. Sales reached an all-time high and operating profit more than doubled. Direct-To-Client sales represented a whopping 76% (!) of the group sales and over 50% for its Specialist Watchmakers. In addition, the chairman – Johann Rupert – shared some valuable insight into the group’s growth and in particular the watch brands (which Richemont calls its ‘Specialist Watchmakers’).

Richemont is a diversified group, and not purely focused on watchmaking. In its portfolio, you will find Jewellery Maisons, Specialist Watchmakers, Online Distributors, and Fashion & Accessories Maisons. Now, at DE GRIFF we have a rather unhealthy and most certainly financially unsound obsession with watches, so we shall focus on the ‘Specialist Watchmaker’ results in particular. The Chairman highlighted “the Specialist Watchmakers’ strong sales rebound (+53%) to € 3.4 billion and operating margin recovery to 17.3%, with nearly all Maisons exceeding pre-pandemic sales levels. The Specialist Watchmakers reaped the benefits of direct-to-client sales exceeding 50%, achieved through continuous improvements in distribution, communication, notably on social media, and supply chain management. The increased appeal of high-quality watches to Millennials and Gen-Z is very positive for the future”.


Overall Group results, compared to the year ended 31 March 2021:

  • Sales up by 46% at actual exchange rates and by 44% at constant exchange rates, with double-digit increases across all business areas, regions and channels; growth momentum led by retail and the Americas
  • Operating profit more than doubled to € 3 390 million, delivering improved operating margin of 17.7% driven by:
    • Jewellery Maisons with 49% sales growth at actual exchange rates (+47% at constant rates) and 34.3% operating margin;
    • Specialist Watchmakers growing by 53% at actual exchange rates (+50% at constant exchange rates) and achieving 17.3% operating margin;
    • Online Distributors growth of 27% at actual exchange rates (+26% at constant exchange rates), YNAP stand-alone EBITDA at breakeven before exceptional reward payment; ongoing discussions with Luxury New Retail (‘LNR’) partners;
    • Other business area with strong growth (+53% at actual exchange rates, +51% at constant exchange rates) and significantly reduced operating loss;
    • Suspension of commercial activities in Russia resulting in € 168 million negative operating result impact.
  • Profit for the year rose by 61% to € 2 079 million
  • 55% increase in net cash position to € 5 251 million, supported by strong cash flow from operating activities and strict working capital management

The Chairman’s commentary also showed the ever-increasing importance of the direct to consumer online sales: “Our Maisons and businesses’ continued focus on client-centric initiatives, resulted in direct-to-client sales further progressing to 76% of Group sales across our directly-operated stores and the online retail channel. We have an improved insight into client profiles, allowing us to better meet expectations, nurture closer relationships and optimise supply chain management. While wholesale sales recovered from last year, direct-to-client sales rose by double digits compared to both the prior year and on a two-year comparative basis. This was further enhanced by the return to in-person high-jewellery events and the long-awaited Watches and Wonders event which opened its physical doors in Geneva for the first time in three years.”

Great news for the Group, less so perhaps for its brick and mortar authorized dealer network?

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