Table of Contents
Key Points
- Richemont reported a 1% decline in third-quarter sales, largely due to weaker demand in China.
- The Specialist Watchmakers division experienced a 17% drop in sales, highlighting struggles in the high-end watch market.
- Despite sales challenges, Richemont acquired Italian jewelry brand Vhernier and struck a deal to sell YNAP for a 33% equity stake in Mytheresa.
Richemont, the luxury conglomerate behind iconic brands like Cartier and Van Cleef & Arpels, reported a modest one-percent decline in third-quarter sales, with total revenue reaching 10.1 billion EUR ($10.83 billion). Chairman Johann Rupert attributed the dip to weak consumer demand in China, particularly in the luxury watch segment, which has been slow to recover compared to other regions that showed signs of strength.
Segment performance
The jewelry division remained robust, with a two-percent increase in sales at actual exchange rates, or four percent when adjusted for constant exchange rates, demonstrating the enduring appeal of high-end jewelry across Richemont’s Jewelry Maisons. In contrast, the Specialist Watchmakers division faced significant challenges, recording a 17-percent decline in actual sales (16 percent at constant exchange rates), largely due to decreased demand from China.
Richemont’s other business segments fared better, with sales rising by 4 percent at both actual and constant exchange rates, suggesting that diversification efforts may be bearing fruit amidst specific market challenges. While China’s slowdown impacted overall results, Richemont saw strong performances in other regions: Europe recorded a four-percent increase in sales, fueled by strong local demand and higher tourist spending; North America continued to show resilience, with sales up 10 percent; Japan was a standout with a 32-percent surge in sales; and the Middle East & Africa also grew, reporting an 11-percent increase. In the Asia Pacific region, however, sales contracted by 19 percent, as declines in China, Hong Kong, and Macau overshadowed gains in markets like Korea and Malaysia.
Strategic portfolio adjustments
Richemont continued its strategic shifts to strengthen its portfolio and adapt to fluctuating market demands. The company completed the acquisition of Italian jeweler Vhernier, bolstering its presence in luxury jewelry, and signed an agreement to sell YNAP to Mytheresa in exchange for a 33 percent stake, signaling a refined approach to its online strategy. These moves highlight Richemont’s commitment to fortifying its brand portfolio amid regional challenges.
Billionaires.Africa previously reported on Richemont’s adaptive strategies in the luxury market, noting the company’s resilience in the face of changing consumer preferences and market pressures. As Richemont navigates these fluctuations and expands its reach, its strategic investments and portfolio adjustments could position it for growth as key markets gradually stabilize.
