ZURICH (AFP) – Cartier owner Richemont said yesterday its quarterly sales in China tumbled by 27 per cent as the deepening economic malaise in the world’s second-largest economy lashes luxury firms.
The Swiss luxury group said overall sales dipped one per cent to EUR5.27 billion (USD5.74 billion) in its first quarter that ended June 30 thanks to growth in the Americas, Japan and Europe.
But sales in the Asia Pacific region excluding Japan – Richemont’s top sales area – fell by 19 per cent to EUR1.8 billion, and by 27 per cent in China, Hong Kong and Macau.
“The decline reflected both the low level of consumer confidence and the strong comparatives ranging from double-digit growth in the mainland to triple digits in Hong Kong and Macau over the prior- year period,” the company said in a statement.
Data released on Monday showed the Chinese economy’s growth slowed to 4.7 per cent in the latest quarter that ended June 30, while retail sales growth dropped to two per cent in June.
China has become a key market for luxury firms in recent years thanks not only to its rising ranks of millionaires but also the swelling middle class. But a property market crisis and slowing overall economic growth has chilled luxury spending.
Burberry switched chief executives on Monday as it seeks to stem ‘disappointing’ sales, including a 21 per cent drop in comparable stores sales in mainland China last quarter.
Meanwhile Swiss watch group Swatch, which owns a number of luxury brands including Omega, reported a “sharp drop in demand for luxury goods in China”.
Richemont’s quarterly performance was carried by its main jewellery division, which saw its growth edge two per cent higher, while sales by its specialist watchmakers fell 14 per cent.
Japan posted the largest percentage gain in sales, soaring 42 per cent to EUR603 million.
