Richemont Weathers Hong Kong Storm

RAPAPORT... Jewelry sales at Richemont increased 8% in the first fiscalhalf, even as the company faced a challenging market in Hong Kong. Jewelry proceeds at Cartier and Van Cleef & Arpels roseto EUR 3.74 billion ($4.12 billion) in the six months ending September 30,while watch sales grew 1% to EUR 1.57 billion ($1.73 billion), Richemontreported Friday. Cartier's Love and Juste un Clou jewelry brands and its Panth??re andSantos watch collections performed well, as did Van Cleef's Alhambra and Perl?(C)elines. Richemont saw global growth in the division, with Asia Pacific and Japanproving the strongest regions for jewelry overall, the company noted. However, Richemont chairman Johann Rupert noted consumerdemand was increasingly influenced by global geopolitical tensions, mainly inthe Hong Kong market, which affected watch sales. "Primarily due to a difficult environment in Hong Kong, thespecialist watchmakers registered muted sales growth," he explained. Group sales rose 9% to EUR 7.4 billion ($8.15 billion) forthe period, while operating profit plummeted 61% to EUR 869 million ($957.6million). Richemont attributed the drop in profit to a one-off cash gain duringthe same period a year ago, as the shares it held in Yoox Net-A-Porter werereevaluated after the company's buyout. Not including that gain, profit was "broadly" stable, the luxury retailer noted. Still, shares in Richemont fell 6%Friday following the announcement. The figures do not include jeweler Buccelati, which Richemont acquired on September 26, it said. Image: A Cartier store in Japan. (Flickr)