Richemont Watches Positive Results
The third largest luxury goods supplier in the world Richemont has released a statement which explained that their profits are down this year compared to last year.
The chief executive gave an interview on Wednesday to a number of journalists where he was quoted as saying that the company would not earn as much as last year but had taken steps including a hiring freeze as well as cutting a number of positions so that the company would see out this particular financial crisis.
He did not forecast any turnaround in the US luxury watch market just yet and was reluctant to predict whether the financial crisis in Europe had actually bottomed out yet; he in fact suggested that the financial crisis was still in full swing, and could have a little bit more to give.
Everybody across Europe is hoping for a change in the financial mood before the end of the year, however retailers especially are bracing themselves for a tough third and fourth quarter, although they will be delighted if they are wrong.
The demand for the majority of expensive watches has been hit very hard, although the Richemont brand has not been hit as severely as some of the brands in the Swiss watch market.
However various other markets were taking up the slack including the Chinese market which Richemont disclosed would be its single biggest market within three years; quite probably overtaking that of Japan.
The company did not plan to take over or acquire any additional companies at the moment as it is not a top priority, however Richemont could well afford some acquisitions given its current net liquidity of over 820 million at the end of March this year. These CEO also reiterated that should more funds be required these could be easily accessed via the normal capital markets, and only this particular strategy is not a priority at present.
