Luxury industry woes: Richemont 5-month sales decline
Luxury group Richemont announced a 13 per cent decline in revenue for the five months spanning from April to August, the group announced Wednesday.
In the Middle East, the group, which owns numerous high-end brands like Cartier, IWC Schaffhausen, Jeager Le-Coultre and Dunhill, among others, reported that sales in the Middle East and African regions dropped by ten per cent.
Its specialist watchmaking vertical took the worst hit, with sales declining by 18 per cent, followed by the jewellery business, which declined by 15 per cent.
Going forward, Richemont finds that the “current negative environment as a whole is unlikely to reverse in the short term,” it said in a statement.
“We consider that the difficult trading conditions are likely to continue during September. Operating profit for the six months ending September 30, 2016, is therefore expected to be approximately 45 per cent below the prior year’s level. Consequently, we anticipate profit for the period for the six months ending September 30, 2016, will also be impacted at a broadly similar level to the decline in operating profit,” the group added.
Richemont’s results reflect on the challenges faced by the luxury industry as a whole and by Swiss watchmakers in particular.
The watchmaking industry is facing yet another year of declining exports, as a result of a number of economic and geopolitical challenges across regional markets.
The latest statistics released by the Federation of the Swiss Watch Industry FH, the official organisation measuring the status of Swiss watch exports, shows exports are in continuous decline. The value of the industry’s exports dropped 14.2 per cent in July, compared with July 2015, when it was at 1.6 billion Swiss francs.