Richemont takes off in 2021, but not everything is doing as well as it should

Richemont takes off in 2021, but not everything is doing as well as it should

Richemont’s fiscal year 21/22 took off: +121% on 2020 and +18% on 2019 in the first quarter of the year (fiscal April-June). Jewelry and the US market were the growth levers. The only segment that isn’t doing as well as it was in 2019 is fashion. The division “Other” (which groups the fashion brands of the group), is up 116% on 2020 but down 11% on 2019.

Not everything is doing as well as it should

During the first fiscal quarter, Richemont more than doubled its revenue, reaching 4.397 billion euro. At constant rates, the increment was equal to +129% on the same period of 2020 and +22% on 2019. America, Asia, Middle East and Africa were the markets that earned the most, while as far as categories go, jewelry went up by 43% at constant rates, compared to 2019. Yet, fashion and accessories remain the group’s Achilles’ heel.

The division “Other”

The division that groups Alaïa, AZ Factory, Chloé (in photo), Dunhill, Montblanc, Peter Millar, Purdey, Serapian and, recently added, Delvaux, accounted for just 10% of the revenue. With 440 million euro in revenue, sales remained stable with 2019’s levels. A performance that, according to Richemont, partially reflects “the persistent challenged of the wholesale channel, specifically that tied to travel”.

New governance model

Starting on September 8th, Richemont will change its governance model. Simply put, the brand’s managers will focus on brand development and will no longer be a part of the Bod and Executive Committee. “It’s time for us to have a leaner structure”, commented the president Johann Rupert. “Agility during the pandemic, along with a decisional process that is quick and well-informed were essential. Decisions must be taken as close as possible to clients. These governance-related changed of the brands will allow the group’s management to focus exclusively on brands and their sustainable development”.

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