Richemont weathers luxury slump in Q1

Sign up to receive the Vogue Business newsletter for the latest luxury news and insights, plus exclusive membership discounts. Amid a management reshuffle at the top end, Richemont, owner of Cartier, Van Cleef & Arpels and Chloé, said sales grew 1 per cent at constant exchange rates to €5.27 billion in the first quarter ending 30 June, above consensus expectations of 0.5 per cent. The Swiss luxury group said growth was led by Japan (up 59 per cent) and jewellery maisons (up 4 per cent, above consensus expectations of 2.3 per cent). Specialist watchmakers declined by 13 per cent, dragged down by China — though Vacheron Constantin (whose CEO Louis Ferla was just appointed CEO of Cartier) and A Lange & Söhne proved resilient. Asia Pacific sales fell 18 per cent as “higher sales in South Korea and Malaysia only partially mitigated a 27 per cent decline in China, Hong Kong and Macau combined”, the company said. Sales in the Americas and Europe grew by 10 per cent and 5 per cent, respectively. “A beat in jewellery should act as a relief despite sharp deterioration in specialist watchmakers and poor Greater China performance,” Citi head of luxury goods equity research Thomas Chauvet wrote in a note. The group’s ‘Other’ business area witnessed a 6 per cent sales increase, including 4 per cent growth at its fashion and accessories maisons, which features Gianvito Rossi, consolidated since 1 February. “The ongoing momentum of Alaïa and Peter Millar broadly compensated for softer sales at most of the other maisons, including at Chloé,” Richemont said, noting that Chemena Kamali’s debut collection as Chloé creative director only hit stores at the end of the quarter. Richemont’s first-quarter earnings “should be met with some relief after the unhelpful setting of the scene by the Swatch group some 24 hours ago (net sales decreased 10.7 per cent at constant rate in the first half). Of course the divergence in jewellery and watches performance [at Richemont] will trigger questions around the inventory position in the latter,” Jefferies analysts wrote in a note. This comes after Burberry reported that retail sales tumbled 22 per cent year-on-year (at reported exchange rates; 20 per cent at constant) in the first quarter, while Hugo Boss reported sales down 1 per cent at constant exchange in the second quarter — “delivering its weakest quarterly sales growth since Daniel Grieder joined as CEO in June 2021”, Citi’s Chauvet noted. LVMH, Kering, Hermès and Prada will report their quarterly earnings for fiscal year 2025 on 23, 24, 25 and 30 July, respectively. On Richemont, Chauvet sums up: “On the back of resilient jewellery growth and intensifying demand pressures in specialist watchmakers and Greater China, we expect consensus for group sales in the fiscal year ending March 2025 of €21.7 billion (up 6 per cent at constant exchange rates) to remain broadly unchanged for now. Richemont is fundamentally stronger than during prior industry downturns given greater scale, more balanced product/geographic mix, shorter production lead times, greater retail share, cleaner wholesale inventories and a higher cash pile.” Comments, questions or feedback? Email us at feedback@voguebusiness.com. More from this author: Why Cartier brought its Trinity celebrations to Singapore How CEO Michelle Gass plans to turn Levi’s into a $10 billion business Givenchy appoints new CEO

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