Richemont, holding brands such as Cartier and Van Cleef & Arpels, has announced a sharp fall in profits for the first half of its financial year. Net profit fell by 20% to 1.7 billion euros, while sales fell by 1% to 10.1 billion euros.
Jewellery division holds up well
Weak demand in China was the main reason for the disappointing figures. In the Asia-Pacific region, sales fell by almost 20%. The decline was only partially offset by solid growth in other regions. The watch division was hardest hit, with sales down 19%.
Remarkably, the jewellery division of the Swiss luxury group held up well: this division, which accounts for around 70% of total sales, recorded a 4% increase. Chairman Johann Rupert emphasised the company’s resilience in an uncertain world.
Global issues in the luxury sector
Richemont is not the only luxury group to be confronted with falling demand in China. Competitors such as LVMH and Kering have also published disappointing results due to the Chinese market. Analysts have revised their growth forecasts for the luxury goods sector downwards.
Despite these difficulties, Richemont continues to invest in production and marketing. The company also recently sold its loss-making Yoox Net-A-Porter e-commerce business to German company Mytheresa. Although president Rupert remains cautious, he is confident in Richemont’s ability to navigate through the current and future waves.
