By Steve Goldstein
Compagnie Financiere Richemont rose as much as 10% after reporting a surge in sales and confirming it’s in talks over its loss-making Yoox Net-A-Porter business.
Richemont /zigman2/quotes/203783259/delayed CH:CFR -2.31% said fiscal first-half sales climbed 63%, leading to a surge in profit to €1.25 billion from €159 million. Its profit was up 44% from 2019 levels on a 20% rise in sales.
Richemont said it’s in advanced discussions with Farfetch /zigman2/quotes/203824836/composite FTCH +0.60% to boost its partnership, that would have it invest into Yoox Net-A-Porter as a minority shareholder, provide technology and invite Richemont into the Farfetch marketplace. There would be other industry players and investors in investing, Richemont said, so that there would be no controlling shareholders.
“H1 results surprised positively on multiple fronts with a solid group sales and EBIT beat, acceleration of sales growth across almost all divisions, a very strong [Jewellery Maisons] margin beat, and the confirmation of discussions with Farfetch and other parties, which could result in a deconsolidation of the loss-making [online distributors] division,” said UBS analysts led by Zuzanna Pusz.
Third Point’s Daniel Loeb invested in Richemont, its chairman Johann Rupert suggested on a conference call.
“I think he clearly took us more seriously than you guys did when we said that we are going to find a solution for online. And he clearly is a very sophisticated investor and he did what anybody else could do which is to buy shares. If he did and how many, we can’t comment on the share register,” said Rupert.
Rival Swatch Group /zigman2/quotes/203516858/delayed CH:UHR -1.75% rose 3%, and luxury-goods giant LVMH Moet Hennessy /zigman2/quotes/201350549/delayed FR:MC -0.09% added 1%.
Farfetch jumped 17% in early U.S. action, on investor hopes around providing technology.
The Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.16% rose 0.1% to 485.86 in what’s been a steady week for the index.
Of the major regional indexes, the German DAX /zigman2/quotes/210597999/delayed DX:DAX +0.68% gained 0.2%, the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.34% increased 0.3% while the U.K. FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.36% declined 0.4%.
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