Shares in Richemont Group plunged by 6% in early trading today as the group reported an annual fall in revenue and profit.
The Swiss luxury jewellery and watch company reported a 4% drop in sales from €11 billion in its 2016 financial year to €10.65 billion for the 12 months ended on March 31 this year.
Annual profit almost halved from €2.23 billion to €1.2 billion.
Half of the drop in profit was accounted for by a one-off charge associated with the merger of Net-A-Porter with Yoox in 2015.
Excluding this exceptional item, net profit would have dropped 24%, the company said.
“The past year posed challenges for Richemont. The Group responded to changes in demand, which particularly affected our watch business, and shifting patterns of consumption,” said Johann Rupert, chairman of Richemont.
Europe was the worst-performing region for Richemont, with sales down 9%. Results in France and Switzerland were even worse, but the UK was singled out as the only bright spot. “The United Kingdom enjoyed a double digit growth rate in sales following the EU referendum,” the financial report states.
Over 60% of world-wide Richemont sales come from 1117 directly operated boutiques and online stores, up from 55% in FY 2016.
The past six months has seen a purge of the senior management team, including chief executive Richard Lepeu, who retired in March, and chief financial officer Gary Saage, who will leave in July.
Richemont has also replaced several chief executives for its maisons, and promoted George Kern to oversee all watchmaking businesses.
Richemont’s new senior management team comprises Mr Kern, who is also responsible for digital and marketing, and Jérôme Lambert, who has responsibility for the Richemont regional platforms and services and for our other businesses other than Cartier, Van Cleef & Arpels and the specialist watchmakers.
They both took up their new roles formally at the beginning of April.