Richemont posts top sales in Asia-Pacific region

RICHEMONT, the group behind Cartier watches and Chloe handbags, posted forecast-beating sales over the Christmas period, adding to signs that shoppers are splashing out again on pricey treats.

RICHEMONT, the group behind Cartier watches and Chloe handbags, posted forecast-beating sales over the Christmas period, adding to signs that shoppers are splashing out again on pricey treats.

Booming sales in the Asia-Pacific region led to the surprise positive improvement, prompting some analysts to revise upwards earnings estimates for the full year and adding fuel to a rally in Richemont's already buoyant shares. Sales rose 2percent in the third quarter at actual exchange rates, or 7percent when stripping out currency fluctuations, to $2,29billion, (R16,944billion} beating even the highest estimate in a Reuters poll.

"On balance, (Richemont gave) a strong trading update and should be able to sustain its positive earnings momentum, now fuelled by improving top line momentum," analysts at Credit Suisse said.

"The improvement in trading is welcome in the context of a generally difficult economic environment," the world's second largest luxury goods player, controlled by South Africa's Rupert family, said yesterday.

The Asia-Pacific region accounted for around 31percent of Richemont's group sales during the quarter and sales there grew 25percent at actual rates, the group said.

"Forget Japan, China is the new driver of the luxury goods industry. Renewed strength in the US is also reassuring. I was surprised at the strength in watches pointing to restocking coming through - the recession is over for the watch industry," Kepler Capital Markets analyst Jon Cox said. - Reuters

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