Richemont First-Quarter Sales Slump as Covid-19 Hits Jewellery Demand

GENEVA, Switzerland — Luxury goods group Richemont said it had seen "unprecedented levels of disruption" from the Covid-19 pandemic in the three months to June 30, leading its sales to almost halve, and gave no details on current trading or the outlook.

Swiss watchmakers have seen their sales slide due to store closures around the world and as Chinese tourists, their most important customers, could not travel and shop.

"As of 30 June, all distribution centres and most stores have reopened with exceptions in the Americas and travel retail," the maker of Cartier jewellery and IWC watches said in a statement on Thursday.

Sales fell 47 percent to €1.99 billion ($2.27 billion) in its first quarter, Richemont said, a similar decline to that at peer Swatch Group that posted its first ever half-year loss this week.

Richemont shares were indicated 3.8 percent lower.

Richemont said sales had contracted across all regions, channels and business areas. Asia Pacific fared a bit better thanks to a 49 percent sales increase in China, where online sales more than doubled and shoppers unable to travel bought more at home.

Online distributors also fared better than other channels as the pandemic helped accelerate the shift to ecommerce, but were affected by the closure of distribution centres.

Bernstein analyst Luca Solca said Richemont sales came in a touch below expectations, but shares prices were most sensitive about the trading outlook. "Strong Chinese consumer appetite for Richemont's top brands is reassuring on this front," he said.

Richemont last month reshuffled management and had to backpedal on its plan to cut employee bonuses after raising top executives' pay by a third for the year to March.

By Silke Koltrowitz; editor: Michael Shields.