Cartier sales make Richemont sparkle

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STRONG sales of Cartier, Montblanc and Van Cleef & Arpels brands helped luxury goods maker Richemont beat first-half operating profit expectations.

As well-heeled consumers rediscovered an appetite for indulgence, particularly in the United States and Japan, the firm saw profit for the first six months rise by 68 per cent to 227 million. That smashed analysts' expectations of 198m profits.

The Swiss firm, whose portfolio of brands also includes Jaeger-LeCoultre, Piaget, Dunhill, Lancel and Vacheron Constantin, said it expected rising demand to deliver "good growth" over the full year.

Richemont pointed to Cartier, Van Cleef & Arpels and Montblanc as well as its specialist watchmakers, as the key force behind its performance. Each of the brands delivered double-digit percentage sales growth in the first six months of the financial year, which ends in March 2006.

Overall group revenues came in at 1.35 billion, up 16 per cent on the same period the year before.

Analyst Jon Cox, of Kepler Equities, said: "Top-line growth was impressive, driven by demand for luxury watches and Cartier around the globe, particularly in the US."

As the global economy has begun gathering strength recently, it has fuelled demand for luxury accessories such as gems and expensive watches.

Recently, Richemont's Paris-based rival LVMH - maker of Tag Heuer watches and Louis Vuitton handbags - reported an 11 per cent rise in sales for the first nine months of its financial year.

Richemont chairman Johann Rupert said: "Cartier has enjoyed sustained growth in all of its markets with particularly good growth in terms of high-quality jewellery.

"Van Cleef & Arpels is growing and is establishing itself as a leader at the top end of the market.

"Montblanc also experienced very good growth in its watch and leather goods ranges during the six months. Whilst firmly rooted in its writing instrument heritage, Montblanc has very successfully extended its reach into other product lines - a tribute to the strength of the brand."

Overall, sales in the Americas showed the strongest growth at 21 per cent, with an 18 per cent rise in the Asia-Pacific region and growth of 14 per cent in Europe.

Looking ahead, Mr Rupert said: "I am confident that - in the absence of any external events outside our control - Richemont's luxury businesses will report good growth in sales and operating profit for the year as a whole."

Richemont said the rate of growth had slowed in October, with sales in Europe flat compared with the October last year.

Finance chief Richard Lepeu said the group expected good Christmas sales but that it might see a slowdown in the second half due to tough 2004 comparatives.

"Figures seen in the first half will show a slowdown in the second half but we do not expect a dramatic change," he said.