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Net-a-Porter sales strong as Richemont profits soar

Richemont, the Swiss luxury goods group which owns brands including Dunhill, Chloé and Cartier, said that sales and profits soared in the year to March 31 and that etailer Net-a-Porter performed ahead of plan.

Profits during the year at the group rose by 79.8% to €1.1bn (£967.9m), including a one-off gain from the €245m (£215.6m) acquisition of Net-a-Porter in April last year. Total sales during the year jumped 33.2% to €6.9 (£6.1bn).

Sales at Net-a-Porter were €274m (£241m)and the business “generated a positive cash flow and performed above plan”, the group said.

Sales at Richemont’s fashion and accessories division rose 20% and generated profits of €29m (£25.5m), an increase of €21m (£18.5m) on last year.

Sales in Europe, which account for 38% of the group’s business and is Richemont’s “most important region”, grew by 23% driven by sales to local shoppers as well as tourists.

Sales in Japan grew by 18% in spite of the tsunami in March, impacted by the appreciation of the yen.

Group operating profit rose by 63% to €1.4bn (£1.2bn) during the year. Gross margin increased by 210 basis points to 63.7%, reflecting an outperformance of the group’s retail arm compared to the wholesale arm.

Total retail sales, which include the group’s 876 standalone store operations and Net-a-Porter, exceeded 50% of the group’s overall sales for the first time. Retail sales grew 35% at constant exchange rates to €3.5bn (£3.1bn). Excluding Net-a-Porter retail sales rose 24% at constant exchange rates.

Wholesale sales rose by 15% to €3.4bn (£2.9bn). Richemont said the performance was impacted by de-stocking by partners, particularly as planned in the US.

The group said that the strong overall performance had continued in to April when total group sales rose 32% year-on-year.

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