Yet another family-owned luxury group records strong growth

Swiss-based luxury goods group Richemont, which owns brands such as Cartier, Montblanc, Dunhill and Chloé, reported sales that exceeded analysts’ expectations, as consumer spending increases in Asia.

The world's second-largest luxury goods group in terms of sales, whose main competitors are Paris-based LVMH and PPR, owner of the Gucci group, announced a 29% rise in five-month sales from April to August, 35% at constant exchange rates. That beat the 18% estimate in a Bloomberg analysts’ poll and the 17% in a similar Reuters survey.

Growth in the Asia-Pacific region is leading the way with a 59% rise at constant currencies, while sales were up 41% in the Americas region and 22% in Europe. Even in earthquake-hit Japan sales were up 8%.

Revenue increased by 28% in the watch division and 34% in the jewellery unit.
Richemont, which holds its annual shareholder meeting today in Geneva, said while first-half sales will be significantly higher, net income will be broadly in line with last year’s level due to the strong Swiss franc.

Johann Rupert, executive chairman and son of founder Anton Rupert, said in a statement he remained cautious about the next future: "The rest of the financial year is difficult to predict. The problems of fiscal deficits generally and euro zone difficulties in particular are likely to act as a drag on business prospects".

Richemont’s robust results follow on from other family businesses in the luxury industry in the first half of 2011. Hermès sales grew by 22% to more than €1 billion, while LVMH reported a 13% increase in revenues to €10.3 billion.

Richemont was created in 1988 by the spin-off of the international assets owned by Rembrandt group of South Africa (now known as Remgro limited), a tobacco and industrial conglomerate established by Anton Rupert in the 1940s.