Sunday, November 14, 2010

Luxury groups have seen sales rebound strongly

Cartier watchmaker Richemont's (CFR.VX) first-half profit soared more than expected as buoyant demand for top-of-the-range watches and jewellery in Asia and the Americas fuelled the brisk pace of growth into October.

Luxury groups have seen sales rebound strongly from their worst slump in decades and Swiss watch exports have soared this year, with Hong Kong, where mainland Chinese love to shop, still the prime export destination for Swiss watches.

April-September sales at Richemont rose 37 percent, helped by a weak euro, driven in particular by Asian consumers spending on Cartier and Piaget watches, Van Cleef & Arpels jewellery and Montblanc pens.

"A blow-out set of figures," Kepler Capital Markets Jon Cox said, adding that the improved gross margin and the sales acceleration in October were also positive.

Net profit almost doubled thanks to a revaluation gain on recently acquired online fashion retailer Net-a-porter, beating estimates in a Reuters poll.

Shares pared earlier losses, rising 4.8 percent to 53.85 Swiss francs at 1119 GMT, while nearly all of its peers in the STOXX Europe 600 Personal goods and household index.SXQP fell or remained flat.

Richemont shares have risen 50 percent this year, outperforming a 25 percent rise in the sector.

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