Luxurious group Richemont sounds cautious word on cost-of-living pressures By Reuters

By John Revill

ZURICH (Reuters) -Richemont sounded a cautious word about demand for its jewelry and Swiss watches throughout an period of rising inflation and spiralling residing prices after the Swiss luxurious group on Friday posted a uncommon loss throughout the first half of its monetary 12 months.

The proprietor of Cartier jewelry and IWC watches reported a shareholders’ internet lack of 760 million euros ($776.72 million) after taking a 2.7 billion euro non-cash cost associated to its half exit from on-line vogue retailer YOOX Internet-A-Porter (YNAP).

Nonetheless, from its persevering with operations, which eliminated the influence of the write-down and the contribution from YNAP, Richemont’s revenue elevated by 40% to 2.1 billion euros and revenue margins improved.

Gross sales elevated by 24% to 9.67 billion euros, helped by a restoration within the Asia Pacific area and double-digit share gross sales development in all different areas as beforehand locked-down clients returned to its luxurious boutiques.

Chairman Johann Rupert described the figures as “one other set of sturdy outcomes,” however added a word of warning in regards to the future.

“It’s extremely unsure how the political, financial and social landscapes will evolve in Europe and in our different key markets,” Rupert stated in a press release.

“We solely know that we’ll possible face unstable instances forward as central banks search to rein in inflation whereas governments attempt to handle extreme price of residing pressures.”

Analysts have additionally highlighted potential altering client patterns as beforehand cooped up clients swap to spending cash on travelling, consuming out and different treats as a substitute of pricey gadgets like watches and jewelry.

Vontobel analyst Jean-Philippe Bertschy stated Richemont’s outcomes confirmed wonderful gross sales development, revenue and money circulation, “as soon as once more pushed by spectacular jewelry enterprise”, the place each gross sales and revenue rose by greater than 20%.

“Richemont is well-known for giving cautious steerage, which this time is to the purpose, contemplating the continuing powerful atmosphere,” Bertschy stated.

“There is perhaps nevertheless some hope in China with the elevate of the zero-Covid coverage,” he added.

($1 = 0.9785 euros)