Richemont eyes strong 2011 as China demand defies gloom

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Swiss luxury group Richemont said on Friday that it expects to post "significantly higher" operating profits in 2011, as strong demand in China appeared to defy the current gloomy global economic climate.

Sales for the six months ending September 30 jumped 29 percent to 4.21 billion euros ($5.75 billion), while net profit for the period was up 10 percent at 709 million euros.

Sales in the Asia-Pacific region soared 48 percent to 1.71 billion francs, "primarily driven by mainland China, which is now Richemont's third largest market after Hong Kong and the US."

Despite a debt crisis, European markets also returned sales growth of 20 percent to 1.51 billion euros. However, demand came not from the continent itself, but from travellers, as well as Russia, noted Richemont, which owns brands such as Cartier and Piaget.

Johann Rupert, chairman and chief executive of the group described the earnings as "solid" and issued a positive forecast for the rest of the financial year.

"For the second half of the financial year, we face both the impact of global economic problems on the luxury goods industry in general, and the demanding comparative figures against which group sales will be measured," he acknowledged.

"Notwithstanding these challenges and based on the group's performance for the year to date, operating profit for the full year is expected to be significantly higher than last year," he said.

© 2011 AFP

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