Richemont Sales Fall 16%, Remains Cautious on Outlook
Luxury-goods maker Compagnie Financière Richemont SA Wednesday posted an expected 16% drop in five-month sales and said it remains cautious despite signs that the fall in demand for its products is slowing.
"We would prefer to wait until we have more evidence of a broader economic recovery before speculating on the likelihood of a better second half, particularly when it comes to the wholesale business," said Chairman Johann Rupert.
The Geneva-based owner of jewelry brand Cartier and a range of high-end Swiss watches such as Jaeger-LeCoultre said sales in the April-to-August period fell 16%, or 21% at constant currencies, broadly in line with market expectations. No absolute figures were available.
The figures indicate trading conditions remain tough for Richemont despite relatively good business in Asia, said Kepler analyst Jon Cox. "The outlook is more pessimistic than elsewhere in the sector although that probably reflects corporate culture than anything else," he said.
Most market watchers forecast an improving sales trend in the coming months, partly because the comparison with year-earlier period will be more favorable -- the downturn in the global economy began to bite the luxury industry in the second half of 2008.
Richemont said it is in a good position to weather the downturn because it has no debt and a cash position of around €820 million. However, the general situation remains difficult, particularly in the wholesale segment, Mr. Rupert said. In the past few months, the company has introduced short-time labor for its Swiss employees of Cartier and Piaget after years of expanding capacity due to soaring demand.
Swatch Group AG last month reported a 17% decline in first-half sales and said orders from retailers have begun to recover.
Shares in Richemont fell 4.1%, or 1.24 Swiss francs, to 28.78 francs, underperforming a softer Swiss market.
Write to Martin Gelnar at martin.gelnar@dowjones.com
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