In the first quarter of the new financial year, Richemont’s luxury sales grew by 13 percent at actual exchange rates (or by 20 percent at constant exchange rates) including small growth in sales even in the Americas region.
According to the interim management statement of the Geneva-based company, its Jewelry Maisons group’s (which includes Cartier and Van Cleef & Arpels) sales rose by 16 percent (25 percent at constant exchange rates) to $1.2 billion in 2008 versus $1 billion in 2007.
The company’s watch brands (which are made up of A. Lange & Söhne, Baume & Mercier, IWC, Jaeger-LeCoultre, Officine Panerai, Piaget, and Vacheron Constantin) reported a 13 percent increase to $658 million as against $582 million in 2007 for the period.
In terms of regional statistics, sales across the American continent went up by 6 percent (20 percent at constant exchange rates).
Despite a passive state in Japan’s economy, the Asia-Pacific region posted the highest rise in sales due to the strong growth in Hong Kong and China scoring 21 percent (35 percent at constant exchange rates) to $559 million in 2008 from $461 in 2007.
LVMH, the world’s largest luxury products supplier, closed the books on the first half-year of 2008. The company recorded revenues of €7.8 billion, reflecting organic growth (at comparable structure and exchange rates) of 12 percent. Jewelry and watches recorded organic revenue growth of 15 percent. This division’s profit rose by 30 percent reaching ?74 million.
As is reported by LVMH, its retail business in team with De Beers demonstrates sustained growth with the expansion of its store network. The company is also content with the state of affairs among other brands - TAG Heuer and Zenith. Christian Dior’s watches are also selling well due to the synergy between fashion and jewelry design. In the first half-year LVMH added Hublot watches to its line of brands.
Profit from recurring operations increased by 7% to €1.54 billion.
As commented by Bernard Arnault, Chairman and CEO of LVMH, the first half results “demonstrate the exceptional appeal of our brands as well as the effectiveness of our strategy, particularly remarkable given the adverse currency and economic environment seen during this period.” In its forecast for the second half-year LVMH affirms that its business growth will be sustained by the company’s new brands, lines and geographic expansion. “Reassured by the strong momentum in the first half of the year, the Group approaches the second half with confidence,” Bernard Arnault concluded.
Net profits at luxury retailer Bulgari fell 8.8 percent to €31.4 million ($48.9 million) in the second quarter of 2008 brought down by higher operating costs, a slump in its watch sales and weak performance in the Americas region.
Second quarter revenues grew 4.8 percent to €274.7 million ($427.6 million.) Jewelry revenues grew 5.2 percent to ?118.3 million ($184.14 million,) while revenues from watches fell 11 percent to ?65.6 million ($102.11 million,) accessories rose 2.1 percent to ?20 million ($31.13 million). Other categories fell 8.4 percent to ?1.8 million ($2.8 million.)
All Bulgari’s geographic locations except the Americas saw revenues increase.
Revenues in Europe grew 11.7 percent to €108.9 million, though its home market Italy fell 4.5 percent to $32.6 million. Revenues in the Americas fell 21 percent to ?38.5 million, while in Asia rose 10 percent to ?109.5 million, including a 6.7 percent increase in Japan, and the Middle East grew 10.6 percent to ?17.8 million.
Earnings before interest and taxation fell 20 percent to €29 million ($45.14 million) in the second quarter.
For the first half of 2008, Bulgari revenues rose 4 percent to €506.4 million ($788.24 million.) Sales cost decreased less than 1 percent to ?175.37 ($435.99 million.) Net operating profits in January – June 2008 dropped 18 percent to ?50.9 million ($79.22 million.) Net profits for the period declined 7.1 percent to ?54.2 million ($84.36 million.)
Bulgari CEO, Francesco Trapani, said he was particularly pleased with the performance of the company’s jewelry segment, which stood out among its product categories.
Trapani nevertheless limited Bulgari’s growth forecast for the second half of the year due to continued difficult macroeconomic conditions.
Blue Nile, an online diamond jewelry retailer, reported its second quarter net sales reached $73.7 million, which is a bit more than in the second quarter 2007 ($72.1 million). Net profits fell to $3.2 million as compared to $3.8 million one year before. The company expects a small growth in the third quarter.
Diane Irvine, Blue Nile’s Chief Executive Officer, said their disciplined focus on profitability across the business enabled them to deliver earnings that exceeded their expectations.
International sales grew 179% to $8.1 million. This growth was due to expanded shipment offering. Presently, Blue Nile ships its products to nearly 30 countries compared to only four countries one year ago.
Gross profit for the second quarter grew to $15.1 million, or 20.5% of net sales. In the second quarter last year gross profit was $14.9 million, or 20.7% of net sales. Gross profit in the second quarter of 2007 included the benefit of a one-time refund of shipping charges, which increased gross margin ratio by 0.3 percent.
During the quarter, Blue Nile repurchased 10,500 shares of its common stock for $0.5 million. In the third quarter to date, the company has repurchased 466,400 shares of its common stock for $18.2 million. Since the inception of the buyback program in the first quarter of 2005, Blue Nile has repurchased 4.3 million shares for a total of $155.0 million.
In the third quarter Blue Nile expects net sales growth in the range of 0% to 5%.
