Luxury pen maker ST Dupont pessimistic about short-term
PARIS, June 30
PARIS, June 30 (Reuters) - French luxury pen maker ST Dupont said it was relatively pessimistic about the current year due to recent sluggish trading in major markets such as China and Europe after it posted flat full-year sales.
ST Dupont, a rival of Richemont's Dunhill and Montblanc, and one of France's last independent luxury pen and lighter makers, said business in the current quarter to June 30 had been lacklustre, as in the 12 months through March.
"It is too early to say exactly how the year will be... but if you look six months ahead, I remain prudent and rather pessimistic," ST Dupont Chief Executive Alain Crevet told Reuters in a phone interview on Monday.
Crevet said ST Dupont sales were not growing in the current quarter but he hoped trends would improve later in the year thanks to new product launches.
The CEO said the brand had suffered since last autumn from wholesalers in China going out of business due to the country's anti-corruption policy, which targeted presents such as pens and lighters.
ST Dupont makes about a quarter of its business in China and Hong Kong, and around 14 percent in France, where Crevet said demand also remained relatively flat.
The company's sales in the year to March 31 remained at 79.6 million euros ($109 million), but sales excluding licences rose 3.7 percent on a like-for-like basis at constant currencies.
Crevet said the rate of sales growth in the past year was probably one of its lowest since the 2008-09 financial crisis, which hit the luxury market hard. Underlying sales growth in previous years had remained above 10 percent.
In addition, he said it was the first time ST Dupont's sales in China had fallen, declining 5.6 percent in organic terms in the year through March.
But ST Dupont reaped the benefits of cost cuts and better management of its stock, helping operating profit rise to 4.4 million euros from 3.9 million in the previous year.
The shares, which have lost nearly 7 percent so far this year after shedding 23.6 percent in 2013, closed unchanged at 0.27 euros, valuing the company at 142 million euros. ($1 = 0.7331 Euros) (Editing by James Regan)