Hong Kong alongside fashion brands have caused Richemont business to slow down. In the last quarter of 2019 (the third quarter of the financial year), sales carried out by the Swiss giant reached 4.16 billion euros, therefore increasing by +4% at fixed currency rates. They actually slowed down compared to the first six months of the year, during which revenues had gone up by 6%. In other words, Richemont’s performance has been slowing down.
Sales have been increasing in all of the business areas except for Japan (-7% at fixed rates of exchange). The most rewarding market proved to be the European one, as earnings went up by 9% at fixed rates of exchange. In the Asia-Pacific area, sales have been rising by 2%, “driven by a boost in double figures in China and Korea, which smartly managed to offset a heavy downturn in sales in Hong Kong”.
Moreover, bad news from Richemont’s “Other” activities as well. In other words, Richemont have been slowing down because of fashion brands and accessories. In fact, in this segment, business turnover looks more and more marginal. Just for the records, in the quarter it accounted for about 12.6% of the whole turnover of the Swiss multinational corporation. Revenues amounted to 522 million euros at fixed rates of exchange, therefore decreasing by 3%. “Such performance mirrors marketing and sales difficulties that are currently affecting our fashion and accessory houses”. One exception only: “Peter Millar, which keeps flying high in the United States”, they remarked in a press release. According to Reuters, Richemont are supposed to face two challenges. The former is the integration of Yoox Net-a-Porter (YNAP) and Watchfinder portals. The latter is an increasingly threatening competitor, namely LVMH, in the jewellery business, following Tiffany buyout.