// Richemont said it has to be cautious with its cash in light of the ongoing pandemic
// The group said last month that the crisis had severely disrupted its business
Cartier owner Richemont has said it must manage its cash even more carefully this year in light of the Covid-19 pandemic.
Richemont chairman Johann Rupert said the crisis affected the group’s cash flow, which is why it had to slash its dividend proposal.
The Swiss luxury group said last month that the Covid-19 pandemic had severely disrupted its business, leading sales to almost halve in the three months to June.
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Richemont, which owns retailers Cartier, Alfred Dunhill and the Yoox Net-A-Porter Group, saw sales come in €14.2 billion (£12.4 billion) for the year to March 31, while net profit fell from €2.78 billion down to €931 million (£813 million) – well below the €1.21 billion to €1.29 billion several analysts had predicted.
During the final quarter from January to March, Richemont said its sales fell 18 per cent due to the pandemic.
It plans to give warrants to shareholders under a loyalty scheme to be approved on September 9.
Rupert said the company is expected to make changes to its board of directors.
The overhaul is designed to update the group’s business model, especially in the digital space.
“Even at this stage at the end of August, we’re still not clear as to when we’ll see a therapeutic or a vaccine so we still err on the side of caution in terms of cash,” Rupert said.
Walpole, the trade body for the luxury sector in the UK, found last year that the British luxury sector is worth £48 billion to the UK economy.
However, as Covid-19 started to spread globally in January, the value of the FTSE 100 dropped by £44 billion and stock markets around the world experienced a similar fate.
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