Richemont strong as fashion shines, despite big YNAP-linked loss(2022-2023)




bonyadi magazine 


Luxury giant Richemont’s half-year figures on Friday showed that the six months to the end of September were strong as it reported sales and operating profit from continuing operations of €9.7 billion and €2.7 billion, respectively, and good results in its fashion ops. It remained cautious due to the volatile backdrop but is confident about its business going forward



Those figures represented a 24% year-on-year sales increase at actual exchange rates and a 27% jump in gross profit as the gross margin rose by 140 bps to 68.9%



It meant operating profit was up 26% at €2.7 billion, although the company made a net loss for the period of €766 million compared to a profit the year before of €1.24 billion



This was because of the writedown from the YNAP discontinued operation of €2.87 billion, compared to a similar loss in the previous year of €254 million



YNAP is recorded as a discontinued operation after Richemont reached an agreement with Farfetch and Alabbar to sell a controlling interest in the business to create a neutral industry-wide platform. It had previously flagged the major loss



Without YNAP, the profit from continuing operations would have been €2.1 billion compared to €1.5 billion in the previous year

But the overall group sales picture clearly looked strong and even though the rise at constant exchange rates (CER) was less than the 24% actual increase, at 16% the CER figure was still good


The company said it saw double-digit increases at actual exchange rates across all business areas and channels with “improved momentum” in Asia Pacific where sales were up 3%. It enjoyed double-digit increases in all other regions



Growth momentum was led by retail, up 30%, or 21% CER, representing 67% of group sales



The improved operating margin of 28.1% was driven by its Jewellery Maisons (including Cartier and Van Cleef & Arpels) achieving 24% sales growth (+16% CER) and delivering a 37.1% operating margin. Meanwhile, Specialist Watchmakers (including Baume & MercierPiaget, and Vacheron Constantin) grew sales by 22% (+13% CER) and achieved a 24.8% operating margin


Importantly too, its ‘Other’ business area (predominantly fashion and accessories labels) grew 27% (+19% CER) and generated a 4.3% operating margin


Those businesses include major luxury labels, such as Alaïa, AZ FactoryChloéDelvaux, Peter Millar, Montblanc, and Dunhill, among others, as well as now also including Watchfinder


This division hasn't always been the star performer for the group, but this time, it saw the highest growth rate, although the highest profitability was seen in the jewellery operation




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