Sales across Richemont’s brands and retail businesses dropped by 18% in the fourth quarter of its 2020 financial year, which ended on March 31.
Major Western markets were already beginning to feel the impact of the Coronavirus pandemic spreading across the world, but the full tsunami was yet to fully engulf Europe and the United States, which ended the year with sales up 4% and 6% respectively at constant currency exchange rates.
Hong Kong was hardest hit for Richemont, with sales down by 67% in Q1.
Some of those sales were displaced to other Asian markets, helping the Asia Pacific region end the year down just 6%.
Global sales ended the year on €14.2 million, virtually flat on 2019’s €14.0 million.
Watch sales were down 4% globally for the group with Hong Kong the worst affected first by the street protests of last year, and then by the virus pandemic.
Profits dropped by 7% to €2.1 million and Richemont ended the year with cash and equivalents of €6.3 billion and a net cash position of €2.4 billion.
A statement from Richemont chairman Johann Rupert suggests activity is picking up in China since the financial year end.
“There are signs of improvement in terms of our business,” he says. “Since our 462 boutiques in China have re-opened after the virus, we have seen strong demand.”
Ecommerce sales have been increasing across the Richemont maisons, with online turnover contributing 19% of group sales compared to 16% in 2019.
Looking forward to the remainder of the financial year, Mr Rupert says candidly that it is impossible to predict.
“We are experiencing unprecedented times with with severe disruptions across the world simultaneously. The closures of our internal and external points of sales, changing attitudes towards consumption and subdued consumer sentiment will weigh on this year’s results, even if, at the time of writing, we are gradually resuming operations as parts of the world emerge from lock down. It is impossible to make meaningful preconditions at this time,” Mr Rupert concludes.