Sales down 7 percent for Richemont

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Sales down 7 percent for Richemont

January 20, 2009

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Geneva--Luxury goods company Richemont saw sales drop 7 percent in actual exchange rates (12 percent on a constant exchange-rate basis) between October-December 2008, with the company calling today the "toughest market conditions" it has faced in the 20 years since its formation.

According to an interim management statement released on Monday, overall sales for the company fell from approximately $2.16 billion for the same period in 2007 to about $2 billion, with the jewelry sector doing nothing to help buoy sales.

Richemont's Jewellery Maisons sector, which includes Cartier and Van Cleef and Arpels, experienced a 7 percent decline in actual exchange rates (12 percent on a constant exchange-rate basis).

Meanwhile, the company's Specialist Watchmakers sector, which includes A. Lange and Sohne, Baume and Mercier, IWC, Jaeger-LeCoultre, Officine Panerai, Piaget, Roger Dubuis and Vacheron Constantin, saw sales slide 5 percent in actual exchange rates (11 percent on a constant exchange-rate basis).

From a regional standpoint, sales in the Americas took the sharpest dive, dropping 24 percent in actual exchange rates (28 percent on a constant exchange-rate basis) due to a decline in consumer confidence.

Sales in Europe also declined, falling 8 percent in actual exchange rates (9 percent on a constant exchange-rate basis.)

Meanwhile, sales in the Asia-Pacific region represented 25 percent of the company's sales during the quarter, with sales increasing 4 percent in actual exchange rates (but falling 2 percent on a constant exchange-rate basis.)

Sales in mainland China increased 24 percent at constant exchange rates during this period.

In the statement, Richemont said its outlook for the foreseeable future is pessimistic, but that the company has acted conservatively and plans to emerge from the economic crisis a stronger organization.

"Given the current economic climate and the uncertainties facing us, we see no cause for optimism. We must assume that there will be no significant recovery in the foreseeable future and plan according to cope with this situation," the company stated.

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