The first quarter results are in and the luxury brands are laughing all the way to the bank. The luxury industry as a whole is outpacing the growth of the global economy. The economic recovery has made it possible for certain industries to regain some of its loss in sales. But the numbers released by the luxury brands are so strong that it is evident that all segments of the industry is not just recovering but racing ahead to record sales and profits. Coach despite losses in Japan due to the earthquake registered an 18% increase in profits. Hermes separated from Gaultier and saw its sales jump by 25.5%. Burberry, Bulgari have all recorded significant growth in sales. But the surprise of the pack has been Crocs- the plastic shoes brand which saw its revenue going up 36% to 4226.7 million and its profits trebling compared to last year figures.
Burberry, the British luxury clothing retailer declared its annual results for the year ending March 31. They were expected to declare good results but they managed to beat the market estimates marginally with a pretax profit before exceptional items of GBP297.9 million. This is an increase of 39% over the corresponding period last year. They have established themselves in the China market and leveraged it to record double digit growth in both its retail and wholesale operations.
Luxury jewelry retailer Tiffany & Co. beat the market expectations and boosted its profits by 26% in the first quarter. There was some apprehension that they might lose sales as a result of increase in prices implemented by them to take care of the rising costs of precious metals and diamonds. But by and large there was no impact of prices on the demand. Their sales in Japan had dropped 16% due to the earthquake but the April sales rebounded 6% over last April sales. Their shares are performing well and they have upgraded the outlook for the full year.
It was Bulgari’s first financial result after ceding control to the French luxury conglomerate LVMH Moet Hennessy Louis Vuitton. The Italian jeweler seems to have taken the right decision because the first quarter results indicate a complete turnaround. They witnessed a growth in sales all over the world, particularly in the greater China area which has become their largest single market. Bulgari posted a net profit of €9.3 million in the first quarter in place of a net loss of €8.3 million in the corresponding period last year.
Giorgio Armani, the designer goods firm has managed to fight off competition. Though the increase in their sales has been a modest 4.6%, their judicious management has boosted their operating profits by a whopping 47.5% to €321.6 million. Giorgio Armani, the chairman was satisfied with the results as he explained that the trading conditions remained very difficult and it was their focus on maintaining high-quality distribution and satisfying rapid changes in consumer demands that saw them through and help them record impressive figures.
Richemont, whose brands include Cartier and watchmakers IWC and Piaget announced an 82% increase in its annual net profit. The net profit was €1.09 billion ($1.55 billion) for the 12 months ended March 31, compared with €599 million a year earlier. Sales rose 33% to €6.89 billion from €5.18 billion. The Swiss company has extended its shares buyback program to 15 million shares. April has started off their new financial year on a positive note with an increase in sales of 32%.
Jaguar Land Rover, the luxury carmaker has proved to be the greatest the greatest industrial turnarounds in British corporate history. Despite Mr. Ratan Tata’s adverse comments about the British work ethics the annual financial results of the company were simply astonishing. JLR made a profit after tax of £1.043 billion ($1.6 billion) in the financial year to March 31, compared to £32 million ($49.3 million) the previous year. JLR which made 240,000 cars last year has become Britain’s single largest automotive employer, with nearly 20,000 staff.
