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Published
May 12, 2023
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Richemont sees progress in strong year as China and fashion brands rebound

Published
May 12, 2023

Richemont’s full-year results on Friday saw the luxury group reporting sales and operating profit “at an all-time high” of €19.9 billion and €5 billion, respectively. Operating profit was up an impressive 34% as the operating margin rose to 25.2% from 22.4%.


CHLOE - Spring-Summer2023 - Womenswear - France - Paris - © ImaxTree



The report contained a mixture of good news, and some bad, although the bad news was largely confined to discontinued operations, and the overall impression was one of Richemont making progress.

For instance, it saw a 60% increase in profit for the year from continuing operations at €3.9 billion, but there was also a much wider €3.6 billion loss from discontinued operations, primarily resulting from the €3.4 billion non-cash write-down of YNAP net assets. That business, which owns Yoox and Net-A-Porter is being separated into a new unit partly owned by Richemont and Farfetch.

This meant final profit for the year that ended in March was €301 million, but that was 86% lower than the €2.079 billion of the year before.

Back with the good news, the owner of brands including Chloé, Cartier, Van Cleef & Arpels, Montblanc, Dunhill and Alaïa is cash rich with net cash rising to €6.549 billion from €5.251 billion. 

And it said group-wide sales rose 19% at actual exchange rates and 14% at constant exchange rates (CER). They were driven by retail (that is, directly-operated stores), which was up 22% (or 17% CER). Its retail ops represented 68% of group sales.

And it was encouraging that it saw sales growth across all regions, distribution channels and business areas, with growth resuming in Asia Pacific. Sales there rose 6%, and although they were up only a slim 1% CER, the fact that they were positive was crucial in this key region that struggled in the pandemic and post-pandemic periods. The region saw a “significant” sales rise in Q4 following the removal of travel and health restrictions in mainland China.

The group enjoyed double-digit increases in all other regions both actual and CER, “led by Japan and Europe” but closely followed by the Americas.

Its Jewellery Maisons generated 21% sales growth (16% CER), while Specialist Watchmakers grew sales by 13% (8% CER).

Its ‘Other’ business unit, which mainly focuses on its fashion and accessories brands but also now includes Watchfinder, saw a 19% sales jump (13% CER) to €2.7 billion. Although Watchfinder’s performance was “muted”, the fashion and accessories ops boomed, "driven by renewed creativity and higher travel retail footfall”. The unit as a whole was profitable to the tune of €59 million at an operating level, but those fashion businesses specifically reported operating profit of €94 million.

Richemont said that “strong Maisons have emerged alongside Montblanc and Chloé, especially Peter Millar, including its G/FORE business, which generated sales in excess of €0.6 billion”.


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In other news, it also said that it’s making board changes “in order to continue addressing age, tenure, skills and geographic representation” among its directors “while preserving the wealth of knowledge that long-serving Board members have brought to the decision-making process of the group”.

Several non-executive directors are stepping down next year and in 2025. And it has nominated Fiona Druckenmiller for election to the board as a non-exec. 

That’s significant because the American national is founder of FD Gallery, a “carefully curated New York-based boutique that offers pre-owned luxury items, predominantly vintage and contemporary jewellery”. 

She also has a financial background, but her experience in pre-owned reflects the increasing importance of this area to luxury businesses. Her jewellery knowledge and the fact that she’s US-based are also key.

Chairman Johann Rupert saids that she “brings her financial acumen gained as an equity portfolio manager on Wall Street and also strong business acumen and jewellery expertise acquired through her venture, the FD Gallery. Her relentless search for beauty and understanding of the American clientele, an increasingly important customer clientele for the group, combined with her empathy for social and environmental causes will be of great value to Richemont”.

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