Johann Rupert’s Richemont under pressure

Richemont met analysts’ sales estimates in the first quarter despite declines in China sales and demand for its luxury watches. 

The Cartier owner reported a sales gain of 1% at constant currencies to €5.3 billion ($5.8 billion). That was in line with analyst forecasts. The company said overall jewellery sales showed strength, rising 4%. 

Richemont, which also owns Swiss watch brands including IWC, Jaeger-LeCoultre and Piaget, is facing slowing demand for its pricey products, particularly in China, where consumers have turned cautious as the economy falters.

Sales in Greater China plunged 27% during the quarter, the company said, and its watchmaking division posted an overall drop of 13%.  

Sales in all regions beyond Asia Pacific were higher, underscoring the acute weakness in China.

Richemont’s report follows worse-than-expected financial results from Swiss watchmaking rival Swatch Group, which posted a 70% drop in profit it blamed on collapsing demand from China and a profit warning from luxury giant Burberry.  

The quarter saw a “reassuring, robust sales performance from Richemont, given the shock of Burberry and Swatch Group yesterday,” Vontobel analyst Jean-Philippe Bertschy said in a note to clients.

Amid a generational shift in management, Richemont — controlled by South African billionaire Johann Rupert — recently named Nicolas Bos as group CEO. The company said the former head of its Vacheron Constantin watch brand, Louis Ferla, would take over running Cartier, the French jewellery maker that is Richemont’s top-selling brand. 

Amid a generational shift in management, Richemont — controlled by South African billionaire Johann Rupert — recently named Nicolas Bos as group CEO.

The company said the former head of its Vacheron Constantin watch brand, Louis Ferla, would take over running Cartier, the French jewellery maker that is Richemont’s top-selling brand.