Jul 16, 2008
Richemont reports Asian sales boost
Jul 16, 2008
ZURICH, July 16, 2008 (AFP) - Swiss luxury goods giant Richemont gleamed amid economic gloom on Wednesday, July 16th showing a 13-percent sales leap in the three months to June on strong demand for its wares in Asia.
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The company beat analysts' expectations of a rise of 9.7 percent to post sales of 1.43 billion euros (2.3 billion dollars).
The Asia-Pacific region "continued to report very strong growth, particularly in China and Hong Kong," with sales up 21 percent, and accounting for for one quarter of all Richemont's overall turnover, the company said in a statement.
Sales were also strong in the company's key market of Europe and the Middle East, up 17 percent, but suffered from the weak US dollar to rise just six percent at actual exchange rates in the Americas.
Japan continued to suffer from "challenging market conditions" with sales down eight percent in the quarter, Richemont said.
Richemont is the world's second-biggest luxury goods maker after France's LVMH, and is home to such prestigious brands as Piaget and Jaeger-LeCoultre watches, Cartier jewellery and Montblanc writing pens.
Jewellery showed "very strong growth" in the period with all regions growing at a double-digit level expect Japan, and watchmakers also reported "strong demand in all regions other than Japan," Richemont said.
Investors welcomed the news and Richemont's shares rose 4.87 percent in opening trade on the Zurich stock exchange, before easing back slightly.
At 12.30 pm (1030 GMT) the shares were up 0.28 percent at 53.55 Swiss francs while the overall SMI index was down 1.81 percent at 6,442.96 points.
However some analysts voiced caution at the sustainability of growth amid an ever-worsening global economic climate.
Alessandro Migliorini of Helvea bank said in a note that he expected growth to "significantly decline" in the coming quarters.
Richemont earlier this year announced plans to split up its businesses into two entities, with its luxury business to be headquartered in Switzerland, and an investment vehicle expected to be based in Luxembourg.
Richemont added that it was in discusions with British American Tobacco, in which it holds a stake, over the proposed restructuring.
BAT contributed 609 million euros to Richemont's results.
"Further announcements in respect of the restructuring proposals will be made when appropriate. No further comment will be made until such time," Richemont said on Wednesday.
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