Richemont, the owner of Cartier, announced a 1% sales increase at constant currencies, reaching €5.3 billion ($5.8 billion), aligning with analyst forecasts but marking a slowdown from the double-digit gains of the previous year. Jewelry sales, which constitute the majority of Richemont’s revenue and profit and include notable brands like Van Cleef & Arpels and Buccellati, displayed resilience with a 4% rise.
Despite the initial positive response, Richemont shares slipped by 0.5% in Zurich, contributing to a 1.3% decline over the past year.
The Swiss luxury goods company, which also owns high-end watch brands such as Vacheron Constantin, Jaeger-LeCoultre, and Piaget, is encountering reduced demand for its luxury items, especially in China. Chinese consumers have become more cautious amid economic downturns, leading to a 27% drop in sales within the Greater China region for the quarter. Additionally, Richemont’s watchmaking division experienced a 13% overall sales decline. Conversely, sales in all other regions outside Asia Pacific showed growth.
This report follows disappointing financial results from Swiss watchmaking competitor Swatch Group AG, which reported a 70% profit decline attributed to dwindling demand from China, and a profit warning from luxury giant Burberry Group Plc.
Vontobel analyst Jean-Philippe Bertschy described Richemont’s sales performance as “reassuring and robust,” especially in light of the recent poor financial disclosures from Burberry and Swatch Group. However, Jefferies analyst James Grzinic noted that the differing performance between Jewelry and Watches might raise concerns regarding inventory levels in the latter category.
In the midst of a generational management transition, Richemont, controlled by South African billionaire Johann Rupert, has appointed Nicolas Bos as the new group CEO. Louis Ferla, previously the head of Richemont’s Vacheron Constantin watch brand, will now oversee Cartier, the top-selling French jewelry brand under Richemont’s portfolio.
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