Richemont’s revenue up 3% in 2017 but profit remains flat

Richemont reveals fiscal 2017 evolution shortly before taking over its ecommerce business. The Swiss luxury group, which is about to close Yoox Net-a-Porter’s acquisition, finished last year with a 3% growth rate in revenues, although profits remained flat.

The company posted a turnover of 10.98 billion euros in fiscal 2017 (closed on March 31). Richemont’s net profit reached 2.15 billion euros, just 1% up. Nevertheless, the group increased its operating margin by twenty basis points, to 16.8% on sales.

The retailer explains that the year was marked by “improved macroeconomic environment, steady progress on Richemont’s transformation agenda and a mixed currency environment”. Asia Pacific led the group’s sales growth last year, with an increase of 12% to 4.3 billion euros. In Europe, on the contrary, the company’s turnover shrank by 3% to 2.9 billion euros. The group emphasized that while the UK performed very well, sales fell in other strategic markets such as France.

Richemont posted a net profit of 2.1 billion euros in 2017, up 1%

Revenues fell in Japan and the Middle East as well, impacted by exchange rates. In America, Richemont’s sales went up 1%. By distribution channels, the company maintained growth momentum in retail, but sales plummeted in wholesale. In-store turnover grew 8% to 6.9 billion euros, while wholesale (including franchises) fell by 5%.

Jewelry and watchmaking remains Richemont’s core business. This business division, which includes brands such as Cartier or Van Cleef&Arpels, increased its turnover by 9% to 6,447 million euros, and its operating result went 15% up to 1,926 million euros.

Last March, Richemont launched a takeover bid to take control of Yoox Net-a-Porter, an operation that got approved soon by both groups’ shareholders. The Swiss conglomerate, owner of Net-a-Porter until 2015, will delist the group from the stock exchange on June 20.

Fashion gets a boost

Richemont also announced today the appointment of Eric Vallat to the newly created role of head of fashion&accessories maisons. The executive will also join the company’s senior executive committee, effective 1 June 2018. Vallat will report to Jérôme Lambert, Richemont’s chief operating officer. 

Vallat has been working for fashion and luxury groups for twenty years, occupying management roles in companies such as Louis Vuitton, Christian Dior Couture, Bonpoint and JM Weston. Since 2014, the director has been CEO of Rémy Martin and, since 2016, he has chaired Mount Gay Rum.