Dive Brief:
- Compagnie Financière Richemont sales were down 1% to 5.3 billion euros, or approximately $5.7 billion, for the first quarter of 2025, according to a Tuesday earnings report.
- Sales in Asia Pacific fell 19%, driven by a 27% decline in China. The company attributed the downturn to a low level of consumer confidence in the region and strong comps from the previous year, when the region was up 40%. The drop was also mitigated by higher year-on-year sales in South Korea and Malaysia, per the release.
- Sales in Japan were up 42% on top of strong year-on-year comps. Richemont credited the regional increase to domestic demand coupled with robust tourist spending from tourists from China, South Korea, South East Asia and America, whose spending benefited from a weakened yen.
Dive Insight:
Overall sales suffered by comparison to a 14% year-on-year comp from the first quarter of fiscal 2024, and Richemont stated in its release that “persistent macroeconomic and geopolitical uncertainties” also impacted its first quarter sales.
Sales in the Americas were up 11% year-on-year, reflecting “sustained domestic demand across all distribution channels,” per the report. Meanwhile in Europe, sales grew 4%, and sales in the Middle East and Africa increased 9%, “benefitting from growing domestic and tourist spending in the UAE and Saudi Arabia.”
Richemont’s retail channel, which accounts for 69% of the company’s sales, was flat. Wholesale and royalty income dropped 6%, largely as a result of poor sales in the Asia Pacific region, per the release.
Online retail was up 6% for the quarter, driven by the company’s Watchfinder operations as well as business from its jewelry division and its fashion and accessories houses.
The company’s jewelry division, which consists of Buccellati, Cartier and Van Cleef & Arpels, saw a 2% rise in sales even compared to a 24% increase the prior year. The watch division fell 14%, and Richemont said “Japan’s noteworthy performance only partially offset lower sales in Europe and Asia Pacific,” noting that China sales saw the sharpest declines.
Most of the company’s fashion houses saw declines as well, “including at Chloé where the debut collection under the new creative director only reached stores at the end of the quarter under review.” However, the company said “ongoing momentum of Alaïa and Peter Millar broadly compensated” for declines elsewhere, and sales at Richemont’s Fashion & Accessories Maisons grew 4%.
While the company didn’t provide an update on the planned sale of YOOX Net-a-Porter, the online division was listed as “discontinued operations” and saw a 15% decrease in sales.
In 2023, Richemont canceled its planned sale of YNAP to Farfetch. Johann Rupert, Richemont’s chairman, said in the company’s annual fiscal 2024 earnings release that there was an ongoing discussion with potential YNAP buyers, and more information would be disclosed by the end of 2024.