Changing channels helps Richemont get richer

The Richemont group includes jeweller Cartier and watchmakers Piaget, IWC and Jaeger-LeCoultre. — Reuters pic
The Richemont group includes jeweller Cartier and watchmakers Piaget, IWC and Jaeger-LeCoultre. — Reuters pic

ZURICH, May 17 — Swiss luxury group Richemont said today its sales and profit surged in its latest fiscal year thanks to its integration of online retailers Yoox Net-A-Porter and Watchfinder.

Richemont, ranked second only to French giant LVMH, has recently focused on online platforms as a sales channel, an area where until recently the luxury goods industry had moved with reticence over concerns over damaging their image.

The buyout last year, and a re-evaluation of the value of Yoox Net-A-Porter helped send net profit 128 per cent higher to €2.7 billion (RM12.6 billion). That was nevertheless below the analyst consensus of €2.9 billion calculated by Swiss financial news agency AWP.

Sales rose by 27 per cent to €13.9 billion in the group’s fiscal year that ended on March 31, thanks also to the addition of Watchfinder, a platform for selling used luxury timepieces.

Excluding these two online distributors sales rose by 8 per cent at the group which includes jeweller Cartier and watchmakers Piaget, IWC and Jaeger-LeCoultre.  

Online has been an area of strong growth for the luxury industry, and with Net-a-Porter carrying its own brands plus rivals’ it aims to become a one-stop shop for the fashion conscious, thus giving Richemont a greater slice of the pie.

And thanks to plans for a partnership with Chinese e-commerce giant Alibaba to develop platforms in China for high-end products, Yoox Net-A-Porter could gain access to what is seen as one of the most important markets for the industry.

Richemont chairman Johann Rupert said “the discussions are progressing” with Alibaba. — AFP