Photo: ANP
Although China’s economic growth is disappointing, demand for jewelry and luxury products from Richemont, known for brands like Chloé and Cartier, is on the rise. The Swiss luxury group saw a rebound in sales in China in the most recent quarter. The increase there offset a slight decrease in sales in North and South America.
Altogether, a turnover of €5.3 billion was on the books. This is an increase of 19 percent if currency effects are excluded. Sales rose 40 percent in the Asia Pacific region, but unexpectedly fell 2 percent in the Americas. In Europe, sales rose 11%, supported by tourist spending from the United States, the Middle East and China. Across the board, the numbers show demand remains stable for jewelry brands like Cartier and Van Cleef & Arpels, but luxury watches from Vacheron Constantin and IWC also continue to sell well.
The exchange rates turned out to be unfavorable to the company. When these are included in the numbers, the turnover rate is only 14 percent higher than it was in the same period last year. Rival watch maker Swatch warned last week that currency effects would affect sales this year. This is because the Swiss Franc is currently trading near an eight-year high against the dollar. Richemont did not disclose earnings numbers in its update.
Richemont isn’t the only luxury company suffering from disappointing sales in the Americas. Rival Burberry also recently reported a decline in sales in that region, mainly due to weak demand from the United States. Richemont Chairman Johan Robert also warned in May that the outlook for the US economy is not good.
It is now clear that the Chinese economy is not developing as many experts had hoped. Earlier on Monday, it was announced that the Chinese economy grew by 6.3 percent in the second quarter. That was a major setback for economists. Experts had previously predicted growth of more than 7 percent.
