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UNWANTED: Demand has declined for high-fashion outfits like this pink satin skirt with almond-green sweater and mauve crocheted handbag, shown here by Claudia Schiffer as part of a collection by designer Karl Lagerfeld for Richemont's Chloé brand. Chloé's sales and operating profit were reported down this week Picture: AP

The group's share price rose 5.6% on Friday on the news, in the face of financial results that pointed to huge pressure on sales of luxury goods in the global economic meltdown.

In reality, Rupert's move is not much of a change - he is presently executive chairman.

CEO Norbert Platt said in May that he would retire for health reasons at the end of the financial year.

Richemont, whose brands include Cartier, Van Cleef & Arpels, Piaget, Vacheron Constantin, Jaeger-LeCoultre, IWC, Alfred Dunhill and Montblanc, reported a 36% drop in profit from continuing operations to à345-million in the six months to September.

Discontinued operations largely reflect the interest in British American Tobacco, which is no longer part of the group following last year's restructuring.

Sales dropped 15% to à2.4-billion after record sales in the previous year. Lower volumes reflected difficult trading in most major markets, particularly in the Americas, Europe and Japan, but were partly offset by continuing growth in the Asia-Pacific region.

Sales through the group's own boutique network were generally more resilient than wholesale sales, Rupert said. Sales benefited from currency movements, without which they would have declined by 20%.

Operating profit dropped 39% to à390-million, accompanied by a sharp narrowing of the profit margin to 16.4% from 22.7% previously due to the strengthening of the Swiss franc, lower levels of manufacturing capacity utilisation and an increase in inventory provisions.

"Since October 2008, the luxury goods industry has faced extremely difficult trading conditions in most of its markets as the financial crisis extended into the broader economy," Rupert said.

"These difficulties have continued to impact Richemont's sales and profitability."

While sales were down, the group "rigorously controlled expenditure and slowed production in order to limit the decline in profitability".

Among its divisions, jewellery sales dropped 14%, specialist watchmakers dropped 17% and writing instruments 16%.

At the operating level, jewellery dropped 22% and writing instruments 6%, but specialist watches dropped 43%.

Among the fashion and accessories businesses, Alfred Dunhill reported flat sales and operating losses. Chloé's sales and operating profit were down.

By region, sales in Europe, which account for 42% of group sales, were down 21%.

In Asia-Pacific, which represents 32% of group turnover, sales in mainland China remained good.

Since the six months to September, sales have dropped by 10%. Asia-Pacific sales remain strong, growing by 11%, but the Americas, Japan and Europe continue to show declines.

Among the brands, Cartier performed well in Asia, with double-digit growth in sales in the previous month.

Rupert said the significant weakening of the dollar, and to a lesser extent the yen, against the euro remains a cause for concern and would affect results in the second half.

As usual, Rupert remained cautious about the future and warned that he was "prepared for a long recovery process".

Rupert paid tribute to Platt, saying that "since he took up the role of CEO in 2004, Norbert has achieved remarkable results in terms of building the group, rationalising its operations and improving our logistics infrastructure.

"Over the period we have seen dramatic growth in sales and profitability at Richemont, even if the crisis of the past year has impacted the luxury goods industry so negatively."

Rupert added that the group's maisons (its different businesses) should operate autonomously, while benefiting from the group's central and regional support services. But, in these times, "we want to ensure consistency in our management approach".