Richemont Reports Record Jewelry and Watch Sales

Cie. Financiere Richemont SA reported Thursday that sales for its fiscal year increased 33 percent to nearly 6.9 billion euros ($9.84 billion). Operating profit for the year, ended March 31, increased 63 percent to 1.35 billion euros. ($1.92 billion).

The Geneva-based luxury goods company reported strong sales across all segments and regions. Among the big winners for the year were jewelry and watch sales.

Richemont’s jewelry “masions,” Cartier and Van Cleef & Arpels, reported a 29 percent increase in sales to a record 3.48 billion euros ($4.9 billion), based on broad-based popularity in terms of geography and product lines. Brand owned boutiques did particularly well.

Its watch properties ( Vacheron Constantin, Baume & Mercier, Jaeger-LeCoultre, Lange & Söhne, Officine Panerai, IWC, Piaget, and Roger Dubuis), reported a 31 percent sales increase for the year to a record 1.77 billion euros ($2.52 billion), with all specialist watchmakers performing well, with the expected exception of, Baume & Mercier, which is undergoing restructuring. Operating margin increased to 21.4 percent of sales, in spite of higher costs of sales due to the appreciation of the Swiss franc and higher precious material prices.
(sales by region, outlook and CEO quotes after jump)

“We are pleased to report that Richemont has met the challenging environment of the past year by achieving strong sales growth across all segments and all geographic regions,” said Johann Rupert, Richemont executive chairman and CEO. “The year under review has seen record sales and profits for our jewelry maisons and specialist watchmakers, despite the stronger Swiss franc.… Net-A-Porter.com, which was acquired in April 2010, is performing ahead of its business plan.”

The company’s retail sales exceeded 50 percent of its overall sale for the first time because it was also the first time online luxury goods retailer, Net-A-Porter.com, was included with total sales. Excluding the e-commerce business, sales increased by 24 percent for the year. Group-owned boutiques increased to 876 boutiques with store openings primarily in growth markets, such as the Asia-Pacific region.

The Group’s wholesale business, including sales to franchise partners, grew despite being negatively impacted by the de-stocking by business partners, planned reduction in the number of points of sale in some key markets, most notably in the United States, and constraints in the supply of finished products.

Sales by Region
Sales in Europe, which account for 38 percent of total group sales, increased by 23 percent to 2.58 billion euros ($3.67 billion), reflecting purchases made by local clients and tourists and the integration of Net-A-Porter.com, to its retail sales mix.

The Asia-Pacific region now accounts for 37 percent of total group sales due to expansion by the company’s brands to take advantage of the increased wealth in the region. Sales for the year increased 36 percent to 2.57 billion euros ($3.66 billion).

Sales in the Americas, which account for 14 percent of group sales, increased 40 percent to 998 million euros. The company says that this strength in sales reflects both weak comparative sales, the integration of Net-A-Porter.com, and positive exchange rates. However, growth in the region also stems from a strong retail performance and higher levels of productivity in its wholesale network. The reported growth has occurred despite the reduction in the number of points of sale in the region.

Japan, which accounts for about 11 percent of group sales, reported an 18 percent increase in sales to 737 million euros ($1.05 billion), largely due to the significant appreciation of the yen. Yen-denominated sales increased by 1 percent, reflecting positive responses to new products and a stabilization of the Maisons’ businesses. The earthquake and tsunami of March 11 and the aftermath occurred shortly before the group’s financial year-end and consequently had only a minimal impact on the group’s performance.

In its outlook, Rupert said sales in the month of April were 32 percent above the comparative period, or 35 percent at constant exchange rates.

“In an environment currently marked by geopolitical unrest and currency instability, we hope that this positive trend will be confirmed in the coming months,” he said, adding that capital investment in its companies over the next two years will run from 6 percent to 8 percent of total sales.

Classic Watches with Subtle Innovations at SIHH 2014

Montblanc Meisterstück Heritage Perpetual Calendar

There’s just 16 luxury watch brands that exhibit at the Salon International de la Haute Horlogerie (SIHH), but the amount of watches that are produced each year is staggering. This year was no exception as I go through the new pieces. This new group represents classic watches, with unusual twists. Each is very different even though they can be grouped under the same category of watches.

Montblanc Meisterstück Heritage Perpetual Calendar
In terms of brands, the story of SIHH has to be Montblanc. First came the Montblanc TimeWalker Chronograph 100, which combines the expertise in its watch manufacturing facility in Le Locle with its Villeret manufacturing facility, known for its handmade movements.

Perhaps just as significant was the release of its Meisterstück Heritage Collection. The line was inspired by the 90th anniversary of the brand’s iconic Meisterstück writing instrument. The top piece in this collection is its perpetual calendar model (top photo), which has to be the first watch with a perpetual calendar and a moon phase for 10,000 euros ($13,700). An 18k rose gold model costs about 16,900 euros ($23,200).

The classic 39mm watch is powered by the automatic caliber MB 29.15.

The date is shown at 3 o’clock, the day of the week at 9 o’clock and the month at 12 o’clock. On the inner scale of the month display, the leap-year cycle is shown by a blue triangle and a leap year is indicated by a red number 4. The moon’s phases are emulated in a window at 6 o’clock; with the moon’s age indicated in days at this window’s upper edge. The only drawback I see is a lack of space between the sub-dials. Other than that this watch has earned the Meisterstück (masterpiece) name.

Van Cleef & Arpels Heure d’ici & Heure d’ailleurs
Another brand that had an exceptional SIHH was Van Cleef & Arpels whose biggest introduction was the Midnight Planétarium Poetic Complication. Now comes the Pierre Arpels Heure d’ici & Heure d’ailleurs, which translates as “The Time Here and the Time Elsewhere.” This watch manages to combine the romantic and practical notions of travel and it does so simply, playfully and elegantly.

First the practical, the dual timezone watch comes in a 42mm white gold case with a crown-set diamond. The dial is made of white lacquer with piqué motif. The automatic movement was developed by the Swiss watchmaking firm, Agenhor, exclusively for Van Cleef & Arpels. It has a double jumping hour and retrograde minutes.

There’s a pureness to the appearance of the white dial that displays the two timezones equally. The main timezone is in the aperture at the top of the dial and the secondary timezone in a lower aperture. There’s a single hand between the hour displays that indicates the minutes on the graduated scale.

The hours of the first and second time zones jump at the same time, thanks to a single sector that synchronizes the two hour discs and the retrograde minute hand. When the latter reaches 60 minutes on the graduated scale, it returns to its starting position at the same instant that the hour display changes.

To do this, the automatic movement is equipped with a platinum micro-rotor that takes up little space. By oscillating in two directions, it can supply energy continuously.

Officine Panerai Radiomir 1940 Chronograph
This watch is available in platinum, red gold and white gold. The 45mm classic cushion case has two push-buttons that control the chronograph functions, the cylindrical winding crown and the bezel. It was originally created by Officine Panerai for the Royal Italian Navy.

The red gold version has a brown dial with the combination of graphic hour markers, Roman and Arabic numerals (known as “California”). The platinum version has an ivory dial, with simple baton or dot hour markers. Common to all three versions is the tachymeter scale for calculating average speed and the two chronograph counters.

The mechanical, hand-wound OP XXV caliber movement is developed on a Minerva 13-22 base. The Minerva manufacture (now owned by Montblanc and known as Villeret) has had historic links with Panerai since the 1920s, when the Swiss manufacturer was a supplier to the Florentine watchmaker.

It is available in a limited edition of 100 for both gold versions and 50 for the platinum version.

Parmigiani Toric Résonance 3
The “oversized” date on this watch solves a practical problem of being able to easily see the display. But aside from the practical and aesthetic considerations, Parmigiani said the impetus behind the eye-shaped window came from a watchmaking challenge. The discs on the date mechanism are the same size as the dial. Despite being cut to a great degree of fineness, they require huge amounts of energy to activate them and even more to stop them dead following the instantaneous jump.

To accomplish this, the first cam accumulates energy through continuous friction over time. This arms the large lever continuously, releasing it every 24 hours onto a 31-tooth wheel. The second cam serves as the brake, by controlling a spring-mounted lever. This device keeps the large date discs permanently immobile, releasing them for just a fraction of a second every 24 hours to allow the instantaneous jump.

The center of the dial employs hand-crafted guilloché decoration that enhances the depth of the date. The 45mm watch is powered by the mechanical hand-wound Caliber PF 359, which also has a minute repeater sounding the hours, quarter-hours and minutes.

Baume & Mercier Clifton Flying Tourbillon
This watch is inspired by a tourbillon pocket watch presented by Alcide Baume in 1892 at the Kew Observatory in England. It is powered by the Val Fleurier P591 mechanical hand-wound movement has a 50-hour power reserve. The flying toubillon, located at 9 o’clock, makes a single rotation per minute. A sub-dial displaying seconds is located at 6 o’clock. The 45.5mm case is made of 18k red gold.

Jaeger-LeCoultre Master Ultra Thin
The ultra-thin classical automatic watch has an aesthetically pleasing traditional design. However, creating this sort of simplicity isn’t always simple to achieve. The 38.5 mm timepiece, available in pink gold or stainless steel, is refined and elegant. A single sub-dial on the “eggshell” white dial shows seconds. The thickness of the watch is a mere 7.58mm.

Jaeger-LeCoultre was able to achieve this level of thinness and simplicity through its automatic movement Caliber 896. The 3.98mm thin movement has a 43-hour power reserve.

Ralph Lauren Safari Watch
The luxury design brand introduced a 39mm version of its Safari Aged Steel Chronometer (RL67) as a follow-up to the collection introduced at SIHH 2013. The hand-wound mechanical movement Caliber: RL 300-1 is COSC-certified for the accuracy and precision of its chronometer. It has a 42-hour power reserve. The case is made of aged black steel and the dial of “azure” anthracite with matte varnish and beige luminescent hour and minute hands and hour markers, and a shiny orange second hand.

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Richemont 3Q Jewelry Sales Up 20% and Watch Sales Up 21%

Cie. Financiere Richemont SA said Monday that third-quarter revenue rose 33 percent to 2.1 billion euro ($2.8 billion), led by the acquisition of online fashion retailer Net-a-Porter.com. At constant exchange rates (when currency shifts are removed) revenue grew 23 percent.

By category, the Swiss company’s jewelry business (made up of Cartier, Van Cleef & Arpels), increased by 20 percent at constant exchange rates (30 percent actual exchange rates) to just over 1 billion Euros ($1.45 billion). Watch sales for the period ended December 31, increased 21 percent (30 percent at actual exchange rates) to 543 million Euros ($720 million). The watch business is made up of the following brands: Jaeger-LeCoultre, Piaget, IWC, Baume & Mercier, Vacheron Constantin, Officine Panerai, A. Lange & Söhne and Roger Dubuis.

By far the largest increase to company’s business is in its “Other” category (up 63 percent), which reflects the purchase last year of luxury e-commerce website, Net-a-Porter.

“Richemont’s Maisons performed well and saw good sales growth, particularly at the retail level, during the three-month period,” said Johann Rupert. Richemont executive chairman and Group CEO. “Sales in the month of December grew by 17 percent at constant exchange rates and excluding the impact of the Net-a-Porter acquisition.”

He added, “Higher comparative figures will make the final quarter of the financial year ending 31 March 2011 more challenging Gross margin is anticipated to be negatively affected by a stronger Swiss franc given the Group's Swiss manufacturing base and by the planned changes to product lines at one of the Group's Specialist Watchmakers, which will be largely implemented during the coming quarter.”

In addition to the companies listed, Richemont owns Montblanc, which makes writing instruments, Purdey, the luxury hunting gun maker, and Alfred Dunhill, the London-based maker of leather goods, fashion and lighters, as well as a watch and jewelry joint venture with Ralph Lauren.