Richemont profit surges 128% after YNAP acquisition

// Richemont net profit skyrockets by 128% to £2.43 billion in the year to March
// Sales grew by 27%, bolstered by acquisition of YNAP
// Jewellery and luxury watch brands delivered the best performance

Richemont has revealed skyrocketing profits in its full-year report, the first one since it acquired the Yoox Net-A-Porter ecommerce group.

The Swiss luxury giant, which owns retailers Dunhill, Cartier and Chloe, saw its net profit for the year to March increase 128 per cent to €2.79 billion (£2.43 billion).

Despite the growth, Richemont said it may have missed analysts’ expectations with its full-year results but remained positive thanks to the revaluation of shares in Yoox-Net-A-Porter, which it acquired last year.

Richemont’s sales grew by 27 per cent during the year, but gross margin fell to 61.8 per cent from 65.2 per cent.

Sales excluding the acquisitions rose eight per cent, with growth in all business areas and most regions.

Richemont also highlighted double-digit increases in directly-operated jewellery and specialist watchmakers’ stores.

It added that its online retail division, of which the recently-acquired YNAP is a part, now accounts for 16 per cent of the group’s total sales and is valued at €2.26 billion (£1.97 billion).

Furthermore, Europe sales grew by 37 per cent thanks to YNAP and Watchfinder.

However, when excluding online distributors, Europe sales rose by a mere one per cent, while UK sales remained flat.

Meanwhile, chairman Johann Rupert said the year under review was one of “transition and consolidation” and “in a relatively supportive environment,” it saw “growth across all business areas and distribution channels”.

However, the company said challenges remain and is currently focusing on developing its leather goods as well as aiming to increase its online presence.

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