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New Net-a-Porter owner sees best ever sales

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Luxury goods group Richemont saw record sales of €6.89 billion (£6.07 billion) across all segments and regions after a growth of 33 per cent last year, results released today reveal.

The owner of luxury brands such as Cartier, Montblanc and Chole, which also bought UK-based online retailer Net-a-Porter in April, saw its operating profit grow an incredible 63 per cent to €1.36 billion in the year ending March 31st 2011.

Excluding the impact of the Net-a-Porter purchase, sales at constant exchange rates were up 19 per cent year-on-year and operating margin reached 20.9 per cent.

Johann Rupert, Executive Chairman and CEO of Richemont, said: “The performance achieved in the year under review, following a major global economic crisis, confirms the appeal of each of the Maisons.

“We will continue to invest in their organic growth through higher levels of capital spending in manufacturing capacity and in the further development of the group’s own retail network, particularly in growth markets.

“Our capital investments are therefore likely to range between six per cent and eight per cent of sales in the next two years.”

Richemont’s impressive sales growth matches other luxury good traders over the last year, with research company Verdict predicting that the global luxury market is set to grow by 50 per cent by 2015.

Strong international growth has helped the Swiss firm over the last 12 months and it now looks well set for further sales rises over the next few years.

Kate Ormond, Retail Analyst at Verdict, said: “Although Europe is an important region for the company, the Asia Pacific region has shown impressive growth of 36 per cent, and it is due to become its top sales region in FY12.”

“Richemont’s acquisition of Net-a-Porter in 2010 has also provided a small boost to sales with the launch of Mr Porter, a website dedicated to male luxury fashion, set to help maintain this in FY12.

“There has been an increase in the number of men buying clothes online and in their spend per head, for example, in the UK, an important luxury market, over five per cent of males who buy fashion online now spend over £1,000, compared to three per cent previously.”

Earnings per share rose by 79 per cent over the 12 months and net cash for the company finished at €2.59 billion after an increase of €707 million during the year.

Rupert concluded: “We intend to take advantage of the many opportunities to further develop our existing Maisons. We are more than ever encouraged by their growth potential and we believe it to be the best route for creating shareholder value.”

Published on Thursday 19 May by Editorial Assistant

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