Richemont Group remains cautious despite positive first half performance
Booming demand in Asia has helped to shield the luxury goods sector from slowing demand in mature markets so far, but investors are bracing themselves for weaker growth as worries about the general economic outlook intensify.
October sales at the world’s second biggest luxury goods group RICHEMONT GROUP still rose 26 percent at constant exchange rates, but this was down from 36 percent between April and September in a sign consumers are turning more hesitant about treating themselves to pricey timepieces.
"For the second half of the financial year, we face both the impact of global economic problems on the luxury goods industry in general and demanding comparative figures," Chairman Johann Rupert said in a statement on Friday. In a conference call, he told journalists it was extraordinarily difficult to say what was going to happen.
"Europe and the United States will be in a mess for a considerable period of time," he said. "We’re seeing increasing tourism but sluggish domestic demand in Europe," he said, adding that the United States had a tendency to fix their problems more quickly.
Luxury goods makers see buoyant growth in the Asia-Pacific region, where Richemont’s sales soared 60 percent in the first half. The Americas region jumped 35 percent and sales in Europe rose 22 percent.
Net profit increased 10 percent to 709 million euros ($963 million), beating forecasts in a Reuters poll.
The group had a net cash position of 2.6 billion euros at the end of September, unchanged from the end of August.
Richemont owns: jewelerry maisons Cartier, Piaget, Van Cleef Arpels, watch companies Vancheron Constatin, Baume & Mercier, IWC, fashion house Chloe and luxury e-tailer Net-A-Porter.