Richemont says faces toughest market conditions in 20 years
LONDON, January 28, 2009 – Swiss luxury goods group Richemont said it was facing its toughest market conditions in 20 years after announcing a 7 percent year-on-year drop in sales in the 3 months to the end of 2008.
Richemont, whose prestigious range of brands includes Cartier and Van Cleef & Arpels, said total sales in October-December 2008 had dropped to 1.55 billion euros from 1.67 billion euros in the same period of 2007, representing a 7 percent drop at actual exchange rates and a 12 percent slide at constant exchange rates.
“All regions reported lower underlying sales, although positive exchange rate effects resulted in modest growth at actual exchange rates in the Asia-Pacific region and in Japan,” Richemont said in an interim management statement.
Richemont said that since October, the real economy has begun to experience dramatic repercussions from the financial crisis.
“Demand for luxury goods, as in other sectors of the economy, has fallen dramatically and Richemont is currently facing the toughest market conditions since its formation 20 years ago,” the company said.
“Given the current economic climate and the uncertainties facing us, we see no cause for optimism.”
Richemont said that it must assume that there will be no significant recovery in the foreseeable future and plan accordingly to cope with this situation.
Richemont said that it had acted conservatively.
“We have a strong balance sheet and Maisons that have withstood several depressions and wars over the centuries,” it said.
“Management is committed to take the necessary steps to not only see the difficult times through but to emerge stronger.”
Richemont’s portfolio of luxury brands includes Cartier, Van Cleef & Arpels, Piaget, Vacheron Constantin, Jaeger-LeCoultre, IWC, Alfred Dunhill and Montblanc.