Short term loss for Cartier-parent Richemont as Swiss banks abaondon cap value of the franc

Profits are expected to drop significantly for Cartier-parent,  Richemont as the Swiss National Bank abandoned the cap on the franc’s value against the euro. The Swiss franc has risen 14.5 percent against the euro so far this year.

The change has cost Richemont €686 million. Right now the company’s net profit projections will drop by at least 36 percent, according to analysts.

Nevertheless, this loss comes on top of the profitable sale of another Richemont company, Net-a-Porter, to Yoox, in an all-stock deal that resulted in the world’s biggest retailer of online luxury-goods, says Bloomberg Business.

Long-term, Richemont stocks are still considered a good buy, with the anticipation of a strengthening euro. But that could simply be wishful thinking since the euro has just hit a one-month low.