Richemont shows decline in the third quarter, Chanel received an award in Geneva, Hugo Boss changed its partners by associating with Porsche and the other news of the day.
Richemont down in the third quarter
Richemont saw its operating income decline by 3% to €1.1 billion in the first six months of its 2018-2019 financial year, with revenues up 21% to €6.81 billion (+24% at constant exchange rates).
Net profit more than doubled to €2.25 billion, but mainly reflected a non-cash gain of €1.38 billion after tax related to the revaluation of the existing shares of the online distributor, Yoox Net-a-Porter, which the group recently acquired.
The group mentioned a slowdown in the sale of watches in China due to increased customs controls to discourage purchases abroad. As China has been the main driver of the sector for several years, a solution will have to be found.
The past months, several analysts had warned of the impact on the sector of a decline in Chinese demand.
“While the volatility of consumer demand continues to increase, partly due to an uncertain economic and geopolitical environment, we remain confident in our ability to achieve our long-term ambitions, thanks to the strength of our balance sheet” said the luxury giant.
Chanel awarded at the Watchmaking Grand Prix of Geneva
The Watchmaking Grand Prix of Geneva unveiled its list of winners for its 18th edition. Excellence, creativity and watchmaking know-how were honoured by an international jury that awarded seventeen prizes.
On this occasion, Chanel was rewarded for the fifth time, for its Boy-Friend Skeleton Calibre 3 watch in the ladies category. In 2017, the 2 Camélia Squelette calibre had already been awarded in Geneva. In 2018, the story continues, Chanel presenting its third home-made movement.
After three years of development, this third movement was designed to look as beautiful upside down. As if suspended in its beige gold case, it consists of a series of intertwined circles aligned vertically.
“Honoured by this award, Chanel sees the marriage of exceptional know-how, which has always been at the heart of her creative process,” the company said the day after the prize list.
Hugo Boss teams up with Porsche for Formula E
Porsche and HUGO BOSS have just announced a partnership for the Formula E for the year 2019. The two German brands thus confirm the interest of automobile sport for the public and sponsors.
From December 2019, the start of the next championship season, Porsche will join the Formula E circuits with its own team, equipped by HUGO BOSS.
The Fashion Group will also be the official supplier of Porsche team outfits worldwide. “Porsche x BOSS” will be available in stores from March 2019.
Made with precious materials: first quality wool and leather, this collection is available in black, red and silver, emblematic colours of both brands.
“HUGO BOSS and Porsche are synonymous with exceptional innovation and outstanding quality” said Mark Langer, CEO of HUGO BOSS.
At the same time, Hugo Boss experienced a larger than expected decline in its third quarter earnings. Indeed, the group’s gross operating income (EBITDA) fell by 12% to 126 million euros, while its turnover remained unchanged at 710 million.
Positive results for Hermès in the third quarter
Hermès keeps a solid organic growth in the third quarter and performed slightly better than expected thanks to leather goods, despite fears of a slowdown on Chinese demand.
Sales of the luxury group, famous for its bags and silk squares, reached €1.46 billion, up 9.4% on a reported basis.
Concerned about the decline of the Shanghai Stock Exchange, the slowdown in growth and the trade fight with the United States do not seem to worry Hermès: Axel Dumas, the group’s manager, said in a conference call with the press that he did not see “any change in trend at this stage“.
Michael Kors sees his sales decline
Michael Kors reported a lower than expected sales for the second quarter of its delayed fiscal year due to lower sales in its European stores.
Indeed, they fell by nearly 10% to $643.9 million (€560.81 million) over the three months to the end of September.
The group, which bought the Italian luxury brand Versace in September for two billion dollars, is reducing its stocks in its European stores in order to create rarity and position itself in a more luxury sector.
Michael Kors has raised his earnings target for 2018-2019 to $4.95 to $5.05 from $4.90 to $5 previously. It also raised its operating margin forecast to 18.2%.
Ralph Lauren relies on his business strategy
Ralph Lauren presents encouraging results as the return to sales growth in North America.
They increased by 1.4% after several quarters of decline. Total sales increased by 1.6% over the period to USD 1.69 billion (€1.47 billion), while the consensus of analysts predicted a decline of 0.9%.
The commercial strategy on social networks has intensified and efforts are paying off, despite higher transport costs in the United States.