Richemont (CFRUY) , the maker of Cartier jewelry and Piaget watches, saw shares spike Thursday after reporting a surprise sales increase in the third quarter as the company has been struggling with a downturn in the Swiss watch industry.
The Swiss company reported a sales increase of 5% in the three months ending Dec. 31 compared with the same time period last year. This was in stark contrast to a 17% decline in the first six months of the year. The improvement in sales was driven by robust local sales and tourist sales in the U.K, the company said.
Richemont shares were up 9.1% to a 52-week high of Sfr77.30 in the first hour of trading in Zurich.
Luxury sales in the U.K. have been robust since Britain voted to leave the European Union in June, owing to the devaluation in the pound making luxury goods cheaper for tourists. The pound is hovering at 32-year lows against the dollar. It was at $1.2309 at 8:45 a.m. GMT.
The company also saw 10% growth in the Asia Pacific region with strong performances in mainland China and Korea mitigating a decline in Hong Kong and Macau.
"Retail sales grew by 12%, compared to the 5% decline in the first six months of the current year, underpinned by solid jewellery sales, positive watch sales and the reopening of the two Cartier stores mentioned above," the company said.
Luxury goods makers, and in particular Swiss watch makers, have seen sales slump amid declining global demand for high end goods led by Chinese travelers, who have cut back on European visits following recent terrorist attacks and spending in Hong Kong due to a government clampdown on graft.
In November, Richemont announced sweeping managerial changes in a bid to curb the fall in sales. It announced that its CEO and CFO would step down along with nearly a third of its board.
CEO Richard Lepeu and CFO Gary Saage will retire next year, at the end of March and end of July, respectively. Eight directors will also leave the board at the company's annual shareholder meeting next year.
The company said it would not replace the CEO. Under a new management model the heads of the groups brands will report directly to the board, a move the company hopes will make the divisions more nimble.