Richemont is deep in the red after goodwill write-offs
At the luxury goods group Richemont, a multi-billion dollar goodwill write-off led to a high loss as expected in the first half of 2022/23. By contrast, sales of jewelry and watches increased sharply.
For the half-year ended in September, Richemont reported a net loss of 766 million euros after a profit of 1.25 billion in the previous year. The sale of online subsidiary Yoox-Net-A-Porter (YNAP) to British online retailer Farfetch, announced in August, resulted in a billion-dollar charge, most of it in the form of impairments.
Analysts had roughly expected the YNAP damper. If you exclude this special effect, the bottom line is a profit of 2.11 billion euros. The basis for this is provided by the operating profit of 2.72 billion achieved in the continued business – i.e. without YNAP – which rose by 26 percent.
Excluding YNAP’s online business, Richemont increased sales by 24 percent to 9.68 billion euros. Analysts had previously expected sales to average 9.43 billion. Richemont is known for luxury goods from brands such as Cartier, Piaget, IWC, and Jaeger LeCoultre.