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Richemont profits fall

Sales at luxury group Richemont in April were 19% lower than last year, and profit before tax fell 24% to €844 million (£757.6m) for the year to March 31.

Richemont’s sales rose 2% to €5.4 billion (£4.84bn) for the year. However, the group reported that good growth in the first half of the year was offset by lower sales in the second half as the economic downturn took hold.

Richemont said that sales of its designer womenswear label Chloe were “well below the level of the prior year” impacting on its profitability. The Alfred Dunhill accessories brand saw a “modest decrease in sales”.

Net profits fell 31% to €1.07 billion (£960m), and profit from continuing operations fell 23% to €751 million (£674m), which the company said reflected a restructuring during the year, which involved the spinning off its non-luxury assets to a new investment vehicle, Reinet Investments.

The group’s net cash at the year end was €822 (£738m).

Richemont chairman Johann Rupert said that the dip in sales last month was “not unexpected given the very strong comparative figure and the state of the world economy today compared to a year ago”, and added that there were “currently very few encouraging signs in the global economic picture”.

He said: “Given these conditions we cannot predict when an overall improvement in trading will come about. Compared to the record level of sales reported in the first six months of last year, trading conditions through to September 2009 will be very challenging indeed.”

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