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Richemont in advanced talks with Farfetch to further partnership

Richemont

Richemont said it was in advanced talks with Farfetch as it seeks to turn its loss-making Yoox-Net-a-Porter (YNAP) business into a neutral, industry-wide platform, with no controlling shareholders.

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The current discussions included Farfetch investing directly in YNAP as a minority shareholder, with other investors to be invited to participate alongside, the luxury group said in a statement.

Richemont also reported a strong performance for the six-month period ended 30th September 2021 with a jump in net profit to EUR 1.249 billion (US$1.42 billion).

Richemont sales rose by strong double-digits across all business areas, channels and regions compared to the prior-year period. Sales also significantly exceeded pre-pandemic levels.

Richemont said sales rose 65 percent at constant currencies, helped by a very weak comparison base. On a reported basis, they were up 63 percent to EUR 8.907 billion (US$10.1 billion), ahead of a forecast for EUR 8.536 billion (US$9.76 billion). On a two-year comparison basis, sales exceeded pre-Covid-19 levels by 20 percent and 24 percent, at actual and constant exchange rates, respectively.

Asia Pacific saw a 47 percent year-on-year increase in sales with substantial double-digit increases across all business areas and main markets. Compared to two years ago, sales were 41 percent higher. With a 42 percent contribution to Group sales, Asia Pacific accounted for the largest share of Group sales.

In Japan, the 56 percent year-on-year increase in sales reflected double-digit growth in all business areas, benefiting from robust domestic demand. Covid-19 however continued to impact the market, notably tourism flows and related purchases, causing a 12 percent reduction in sales compared to the six-month period ended 30 September 2019. Japan represented 6 percent of overall sales, compared to 7 percent in the prior-year period.

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During the period under review, all business areas enjoyed high double-digit sales increases compared to the prior-year period, with Jewellery Maisons expanding by 67 percent. Specialist Watchmakers and the ‘Other’ business area reported strong recoveries at 74 percent and 72 percent, respectively. Compared to the first half ended 30th September 2019, Jewellery Maisons led the growth with a 36 percent sales increase and Specialist Watchmakers returned to growth, expanding by 7 percent.