Financials

Richemont’s Jewelry Sales Sink 41% in Q1

FinancialsJul 16, 2020

Richemont’s Jewelry Sales Sink 41% in Q1

The luxury titan posted double-digit declines across all regions, categories and distribution channels as COVID-19 took its toll.

A white gold and diamond tiara from Richemont-owned brand Buccellati’s high jewelry collection. The luxury conglomerate’s jewelry sales showed resilience compared with other categories in Q1 but still sank 41 percent.

Geneva—Richemont’s first-quarter sales fell by nearly half with double-digit declines across all regions, categories, and distribution channels amid the COVID-19 pandemic.

The luxury titan posted a 47 percent drop year-over-year in quarterly sales at actual and constant exchange rates to just under €2 billion ($2.27 billion) compared with €3.74 billion ($4.27 billion) in 2019.

The decline in sales is the result of “unprecedented levels of disruption,” said Richemont, which led to store closures, a halt in tourism and a dip in consumer sentiment.

Richemont’s online distributors and jewelry maisons both fared better than other categories in the first quarter ended June 30.

Sales in Richemont’s jewelry division, which includes Cartier and Van Cleef & Arpels, were down 41 percent at constant and actual exchange rates, reaching €1.08 billion ($1.24 billion) compared with €1.83 billion ($2.09 billion) a year ago.

The Asia-Pacific region saw a lower rate of decline than other areas, with sales in China up 68 percent over the period, due in part to increased online and in-store spending.

Richemont also credited the increase to the recently opened virtual Cartier flagship store on Tmall Luxury Pavilion, a website operated by Chinese tech giant Alibaba Group.

Milan-based jewelry brand Buccellati recently debuted a new ad campaign paying homage to Italian history, starring aristocrat and journalist Beatrice Borromeo.

Sales in Richemont’s specialist watchmakers division sank 56 percent to €359 million ($409.7 million) compared with €823 million ($939.3 million) in 2019.

The decline was due in part to a “strong reliance” on multi-brand retail partners, limited reach to the Chinese market, and poor online retail penetration, said Richemont.

To help remedy those issues, the division has launched several online initiatives and has participated in the “Watch Show on the Cloud” event to reach the Chinese market.

Breaking it down by region, quarterly sales in the Americas sank 61 percent, attributed to the temporary store and distribution center closures.

Sales in Europe were down 59 percent as a result of public health measures and a drop in local demand, said Richemont. Even as stores gradually reopened, the region lacked its usual international tourism.

Sales in Japan fell 64 percent with most stores closed for the quarter.

In the Middle East and Africa, quarterly sales were down only 38 percent due in part to purchases made in advance of a value-added tax increase in Saudi Arabia.

Asia-Pacific was the “most resilient” region, said Richemont, with sales down 29 percent.

Sales declined across all markets in the

region except China, which posted triple-digit online sales growth and “very strong” domestic in-store sales due in part to the decline in overseas purchases.

Retail sales (sales at Richemont-owned and -operated boutiques) were down 43 percent, though increases were seen in China and South Korea, where restrictions began to ease in May.

Wholesale sales fell 65 percent in the quarter.

Online retail sales were more resilient than other sales channels, said Richemont, declining 22 percent year-over-year, mainly due to the temporary closures of the online distributor’s fulfillment centers.

Online sales, including online distributors, accounted for 25 percent of sales, exceeding wholesale sales and up from 17 percent a year ago.

Richemont did not hold an earnings call or provide financial guidance for the year ahead.

As of June 30, distribution centers and most stores have reopened, with exceptions in the Americas and travel-related retail.
Lenore Fedowis the associate editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

The Latest

MajorsOct 22, 2021
These Jewelry Companies Are Among the World’s Most Valuable Brands

That’s according to Interbrand, which just released its 2021 list of 100 Best Global Brands.

WatchesOct 22, 2021
New Citizen Campaign Shines Light on Solar Power

The “Purposeful Power” campaign will raise money for Everybody Solar, which provides solar power to nonprofits.

CollectionsOct 22, 2021
The Artistry 2022 Catalog Is Out

It’s full of bestsellers to stock up on.

Brought to you by
Buying a Diamond is More Than Knowing the 4C’s

Buyers may be excited about online diamond deals, but there are uncertainties surrounding the authenticity and clarity of the diamonds.

CollectionsOct 22, 2021
Piece of the Week: Nouvel Heritage’s Mood Necklace

The brand’s signature bangle gets a necklace companion.

Weekly QuizOct 22, 2021
This Week's Quiz
Test your knowledge of jewelry news from the week of Oct. 18-22, 2021.
Take the Quiz
SurveysOct 21, 2021
10 Retailers on Why They Expect the Diamond Boom to Continue

However, their optimistic outlook comes with a hint of caution due to a number of factors out of their collective control.

SourcingOct 21, 2021
This Coffee-Table Book Is the Perfect Present for Diamond Lovers

The tome offers an appreciation for the stone through the voices of celebrities, designers, and other diamond lovers.

Brought to you by
Viva Italia! Why the JCK Italian Pavilion Was a Sight Worth Seeing at JCK Las Vegas

One of the highlights of the JCK show in Las Vegas has always been the Italian Pavilion, buzzing with excitement and elegance.

ColumnistsOct 21, 2021
Squirrel Spotting: It’s a Diamond Moment!

It’s no doubt diamond sales are booming, but why? Peter Smith explores the complicated reasons why consumers want the stones right now.

×