Jewelry Shines in Challenging Year for Richemont

RAPAPORT… Jewelry sales at Richemont — owner of Cartier and Van Cleef & Arpels — increased 7% in the past fiscal year, standing out as a rare growth sector for the luxury group.

Revenue from the category rose to $4.55 billion (EUR 4.2 billion) in the 12 months that ended March 31, partly offsetting weakness in its watch division, where sales slid 15% to $4.75 billion (EUR 4.34 billion), Richemont reported Friday.

“The continued strength of jewelry was driven by a particularly strong momentum in Asia Pacific and the Americas,” Richemont’s deputy chief financial officer Burkhart Grund said in an earnings call transcribed by Seeking Alpha. Jewelry’s contribution to overall group sales rose from 35% to 39% as a result, Grund pointed out.

Overall revenue from jewelry maisons Cartier and Van Cleef & Arpels — including watch sales — slipped 2% to $6.48 billion (EUR 5.93 billion), while profit fell 11% to $1.84 billion (EUR 1.68 billion) for the year. The decline was largely due to lower wholesale revenue from timepieces as the company bought back inventory from retail partners that were overstocked.

Group sales fell 4% to $11.64 billion (EUR 10.65 billion), with declines in its wholesale division outweighing growth in its retail operations. Profit plummeted 46% to $1.32 billion (EUR 1.21 billion) for the year, which “posed challenges” for the group, chairman Johann Rupert said.