Sales for the year at both actual and constant exchange rates decreased 4%; excluding exceptional inventory buy-backs mostly related to the repurchase of slow moving watches from multi-brand retail partners, sales at constant rates decreased 2%. According to the Group, changes in demand and the shifting patterns of consumption have particularly affected the watch business, while growth in leather goods, jewellery and writing instruments partly mitigated weak wholesale sales in the period. Cartier watches, within the Jewellery maisons, and the specialist watchmakers are said to have been impacted by exceptional buybacks and capacity adjustment measures, while Montblanc, Chloé and Peter Millar reported good progress.

At constant exchange rates, sales in the Americas increased 2%. The retail channel recorded growth and continued to outperform the wholesale channel. Europe accounted for 29% of overall sales (-8% at constant exchange rates), having improved from a 17% decline in the first half of the year. France and Switzerland registered the largest contractions while the UK enjoyed a double-digit growth rate in sales. All product lines showed positive momentum in the region with the exception of watches. Sales in the Asia Pacific region are reported to have been broadly in line with last year, accounting for 37% of Group sales. Mainland China, now the Group’s second largest market, Korea and Macau enjoyed strong sales.

Profit for the year was “well below the prior year’s level”, -46% to €1.21 billion. “This reduction reflects the non-recurrence of the €639 million non-cash gain resulting from the merger of The Net-a-Porter Group with Yoox Group in October 2015, the lower operating profit and a reversal in net finance costs”, says a company statement. Net finance costs in the year amounted to €160 million compared to a net finance income of €2 million in the prior year, “principally due to the effects of the Group’s currency hedging programme”.

Gross profit declined 4% to €6.8 billion in value terms, “influenced by the inventory buy-back programme, which reduced sales by € 278 million”. Operating profit decreased 14% in the period, with an operating margin of 16.6%.

In the future outlook, Richemont says it will focus on transitioning the Group to adjust to operating in a more sustainable growth environment, by adapting its product offer, communication and distribution to new consumption patterns, while allocating resources primarily towards research and innovation, digital marketing, online sales platforms and training across all of its brands.