The Parisian flagship index approached 7100 points for the first time this morning. The reason was the good results of the Richemont group.
The CAC40 has clearly been on an upward trend since it broke a record high in September 2000. On Friday, the stock market index was back in the green for the tenth time in eleven sessions. Despite concerns about inflation and the resurgence of Covid-19 cases, a new high of 7097.46 points was recorded in the morning.
Good results from the luxury sector were the main reason. Richemont shares in particular soared on Friday, following the publication of better-than-expected quarterly results, and the announcement that negotiations for the sale of its troubled e-commerce platform Yoox Net-a-Porter had begun.
For the six months ended 30 September, sales at the parent company of Cartier and Van Cleef & Arpels reached €8.91bn, representing organic growth of 65%. Compared to the same period in 2019, sales increased by 20%. Analysts were expecting half-year sales of €8.75 billion, according to the FactSet consensus. Richemont’s operating profit jumped to 1.95 billion euros from 452 million euros in the first half of last year, also above consensus.
“The Swiss group’s results are first-rate,” said Jean-Philippe Bertschy, analyst at Vontobel. “Richemont’s profitability is comparable to that of industry leaders such as LVMH or Hermès. These results confirm that the owner of Cartier is the best positioned in the jewellery sector.”
Richemont also said it was in discussions with Fartech with the aim of making Yoox Net-a-Porter a neutral platform, without a majority shareholder.
Shareholders and analysts had repeatedly called for a solution for Yoox Net-a-Porter, which was seen as a drag on the group’s operating profit and share price.
In addition to Farfetch, which could take a minority stake in the business, other players have expressed interest in investing in Yoox Net-a-Porter, Richemont said. Its chairman, Johann Rupert, said however that the group was not in a position to give the names of other potential investors, nor to specify the brands that would be sold on the Farfetch platform.
Discussions are also taking place on the exchange of technology between the two companies and the possibility of the group’s brands joining the Farfetch platform, Richemont said.
In the first half of the year to 30 September, Richemont’s online sales division posted an operating loss of 141 million euros, although turnover from this activity jumped 37% to 1.28 billion euros. The loss was due to increased investment in communications and Brexit–related customs duties and taxes, Richemont said.
Read also > RICHEMONT CONSIDERS SELLING YOOK NET-A-PORTER
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