Richemont jewellery sales solid, offsetting drop in China demand
RICHEMONT posted a slight rise in sales in the first quarter on Tuesday (Jul 16) as solid results from its jewellery brands offset declines from China and its luxury watchmakers.
The Cartier owner reported a sales gain of 1 per cent at constant currencies to 5.3 billion euros (S$7.8 billion). That was in line with analyst forecasts and compares to double-digit gains a year ago.
The company said jewellery sales – which also include the Van Cleef & Arpels brand – showed resilience, rising 4 per cent.
Richemont, which also owns Swiss watch brands including IWC, Jaeger-LeCoultre and Piaget, is facing slowing demand for its pricey products, particularly in China, where consumers have turned cautious as the economy falters.
Sales in Greater China plunged 27 per cent during the quarter, the company said, while its watchmaking division posted an overall drop of 13 per cent.
Sales in all regions beyond Asia-Pacific were higher, underscoring the acute weakness in China. Richemont report’s follows worse-than-expected financial results from Swiss watchmaking rival Swatch Group, which posted a 70 per cent drop in profit it blamed on collapsing demand from China, and a profit warning from luxury giant Burberry Group.
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The quarter saw a “reassuring, robust sales performance from Richemont, given the shock of Burberry and Swatch Group yesterday,” Vontobel analyst Jean-Philippe Bertschy said in a note to clients.
Amid a generational shift in management, Richemont – controlled by South African billionaire Johann Rupert – recently named Nicolas Bos as group CEO.
The company said the former head of its Vacheron Constantin watch brand, Louis Ferla, would take over running Cartier, the French jewellery maker that is Richemont’s top selling brand. BLOOMBERG
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