Luxury industry downturn weighs on Richemont in Q1

Richemont has reported a 14 per cent fall to €1.76bn in operating profits in the year to March as the Swiss luxury goods group which owns the Cartier and Montblanc brands weathered a global downturn in the sector.

Sales fell 4 per cent to €10.6bn in the financial year ending March 31, Richemont said on Friday.

Johann Rupert, the group’s wealthy founder, warned “volatility and uncertainty” were “likely to prevail” in the trading environment, and Richemont would focus on adjusting its products and distribution to new consumption patterns.

Separately, Mr Rupert announced his son Anton Rupert would join the Richemont board.

Along with other luxury groups, Richemont saw demand fall sharply last year, especially for watches, as a result of sluggish global economic growth, changes in Chinese spending patterns and past overstocking. However, Mr Rupert reported signs of an improvement in the second half of the year.

Last year, Richemont even bought back and destroyed some products to ease overstocking. Excluding the impact of such steps, sales would have fallen by only 2 per cent at constant exchange rates, it said.