Richemont sales growth slows as Asia-Pacific revenue drops 15%
To receive the Vogue Business newsletter, register here.
Richemont, owner of Cartier, Van Cleef & Arpels and Chloe, said sales growth slowed in the first quarter, sending shares down 4% in early trading as Asia-Pacific continued to weigh on its performance.
The group’s revenue rose 12% in the quarter ending June 30, the Swiss luxury conglomerate said in its business update on Friday. This compares to 27% growth in the fourth quarter of 2021/22. The company did not comment on its plan to sell the loss-making Yoox Net-a-Porter.
Sales in mainland China (where strict lockdowns in major cities kept stores closed) were down 37% year on year, “although the rate of decline eased to 12% in June when restrictions were lifted. gradually eased,” the company said. Richemont also highlighted “strong momentum” in most other Asia-Pacific markets, including Australia, Singapore, South Korea and Thailand, which partially offset the overall decline of 15 % of sales in the region. Growth in Europe was driven by a return in tourist spending, mainly by American and Middle Eastern customers. Sales in the Americas and Japan increased by 25% and 83% respectively.
Richemont’s high-end watch and fine jewelry brands have strong exposure to China, and Asia-Pacific is the group’s largest market. Fashion and accessories was Richemont’s outlier, with the strongest growth of 28%. “Delvaux showed a strong contribution and the renewed creativity supported by new designers from Alaïa, Chloé and Montblanc had a positive impact on sales,” the company said.
Mainland China “is still in the low double digits in July. No revenge buying and new lockdowns,” says Antoine Belge, head of luxury goods analyst at BNP Paribas Exane, adding that “the macro in China remains unstable.”