Richemont posts drop in profit...
but the Group maintains an optimistic outlook

It has been a while since the Richemont Group would announced results up by 21% (as per our Feb 01 Daily News). The current financial results of Richemont in fact showed a drop when the Group delivered its interim results this week, despite signs of an upturn in the world of luxury goods.

Sales at Richemont declined by 14% to 1525 million Euros compared to the same 2002 period, while the net figure fell by 28% to 289 million Euros.

Richemont is the world's second-largest luxury goods company after LVMH. Johann Rupert, Richemont's Executive Chairman, commented that one of the reasons why his group did not fare well during the past six months was because of its dependence on the European market, which in turn saw a decline in business mainly due to the Sars outbreak, the decrease in travel, and fear of war and terrorism.

Richemont increased sales in Japan by 5% but sales fell by 4% in Europe, and sales in Asia also declined about 3%. Japanese consumers are crucial to the luxury goods market as they are the biggest spenders, with estimates ranging between 40% to 50% of the market, but some reports show that Japanese department store sales are now slowing down.


Operating profits dropped by 56% to 81million Euros, while the net figure fell by 49% to 68 million Euros.

“The six-month period ending September 30 has been one of the most difficult in Richemont's history,” stated Mr Rupert.

The group is determined to continue its cost containment strategy by keeping it below 3%. Last June it reduced the job force by 180 in Switzerland, cutting costs of 11 million Euros.

http://www.richemont.com

Europa Star / NM
November 2003