Luxury group Richemont reports slowdown in Q4 sales, appoints new CEO

RICHEMONT confirmed the slowdown in the luxury sector when the Cartier jewellery owner reported a 1 per cent drop in its fourth quarter sales on Friday (May 17).

The company, which also owns high-end Swiss watch brands like Piaget and Jaeger-LeCoultre,sales fell to 4.80 billion euros (S$7.01 billion) in the three months to the end of March.

In constant currencies, sales increased by 2 per cent, a slowdown from the 8 per cent growth rate in the previous quarter, which covered the three months to the end of December.

Still, the Q4 figure was slightly ahead of the consensus forecast for 4.78 billion euros cited by RBC.

For the full year to the end of March, Richemont’s sales rose 3 per cent to 20.62 billion euros, while shareholder’s full year net profit of 2.36 billion euros missed the 3.09 billion euros in the consensus compiled by Visible Alpha.

“Richemont delivered a solid underlying performance...whilst successfully facing unfavourable foreign exchange movements, demanding comparatives, and ongoing macroeconomic and geopolitical uncertainty,” said chairman Johann Rupert in a statement.

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In a separate statement, the company announced the promotion of Van Cleef & Arpels chief executive Nicolas Bos to become CEO of the group.

Bos will take on the role June 1 and join the senior executive committee, Richemont said on Friday. Current CEO Jérôme Lambert will stay as chief operating officer reporting to Bos and remain on the board, the company said.

“Nicolas has proven himself in operating Van Cleef and building Van Cleef into a proper powerhouse,” Rupert said on a call with reporters. 

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Bos, who has been with Richemont for more than three decades, will take over some management responsibilities and reporting lines previously handled by the company’s chairman, who is 73.

“I’m not stepping back but I am asking Nicolas to assume some of the direct line reporting that I used to handle,” Rupert said.

Bos has driven a growth surge at Van Cleef & Arpels, doubling annual sales since 2018 to about US$2.5 billion, according to analyst estimates.

Rupert said he is working with Cartier CEO Cyrille Vigneron to identify a successor at the head of the French jewellery brand as Vigneron nears retirement age. Cartier accounts for the bulk of Richemont’s sales and profit. 

The changes come as the Swiss luxury conglomerate reported annual profit and sales that met analysts’ expectations, but said business in China had softened in its fiscal fourth quarter as buyers remained cautious.

“There’s nothing wrong with the market, but I think the people were psychologically affected by the very strict lockdowns,” Rupert said of China. He expects China luxury consumers to return but doesn’t know when, he said. REUTERS, BLOOMBERG