The 2011/11/29 at 06:40
Impeccable. Despite the crisis, luxury giants have come out with exceptional quarterly results, supported by China’s insatiable appetite for their products. In mid-November, Swiss group Richemont, owner of the brands Cartier, Montblanc, Jaeger-LeCoultre and Van Cleef & Arpels, roused the enthusiasm of analysts by announcing a turnover up by 29 % at 4.21 billion euros. Not to mention an operating income that has risen by 41 % and a net income that has progressed by 10 %. The CEO, Johann Rupert, has lucidly acknowledged that his group will need to face “the impact of global economic problems on the luxury goods industry”. Nevertheless, Richemont foresees a 2011-2012 operating income far higher than that of 2010-2011, already an exceptional year.
Even better, at a time when most of the industrial sector is rushing towards disinvestment, the Swiss group has confirmed its long-term investment programme already marked by the creation of over 2,000 jobs in Switzerland. Meanwhile, French leather goods specialist Hermès has promised to beat, in 2011, “the best sales in its history”, targeting a 2.8 billion-euro turnover. Indeed, in the third quarter, the establishment housed on the Parisian street Rue du Faubourg Saint-Honoré witnessed its sales leap up by 16 % to 683.2 million euros. While the fourth quarter is traditionally fruitful for the sector, Hermès has, for a second time, hitched up its yearly turnover forecast, now envisaging sales to progress at between 15 and 16 %, as opposed to 12 to 14 % as previously estimated. Nevertheless, the group has underlined that “the reaching of this objective is strongly conditioned by the capacity of professions to meet the acceleration of demand forecast for end-of-year festivities”.
Finally, it foresees a current operating margin, expressed in percentage of sales, greater than the record level of 27.8 % reached in 2010. The PPR luxury pole (Gucci, Bottega Veneta, Yves Saint Laurent…) is already making a mark. In the third quarter, its turnover climbed by 23.1 % to 1.28 billion euros. Indicating its confidence in the future of the sector, PPR acquired the Italian tailor Brioni in mid-November. This acquisition, following that of the US Volcom and the Swiss clockmaker Sowind Group, is in line with PPR’s strategy consisting in making small acquisitions with considerable development potential, chiefly in Asia. This unexpected health is echoed by other major European groups. The German Hugo Boss has raised its income objectives for 2015. Prada, now indexed in Hong Kong, has published net quarterly profits of 179.5 million euros. Supported by Asia, the Italian brand envisages opening 80 new boutiques per year. A strategy backed by the latest survey of Bain & Company which shows that Chinese consumers already represent 20 % of global consumption.