The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Demand for Richemont’s jewellery brands, including Cartier and Van Cleef, gave the group a boost over the Christmas period against a challenging backdrop for the luxury sector.
Sales rose 8 percent year-on-year at constant exchange rates for the three months ending December 31, 2023, reaching €5.6 billion ($6.1 billion) and beating analyst expectations. Shares surged 10 percent in early trading.
Growth was driven by strong demand in Greater China and Japan, where sales for the quarter were up 25 percent and 18 percent respectively. The group also saw sales pick up in the challenged US market, defying the broader slowdown peers are seeing in the region and helping offset a decline in Europe.
Richemont’s greater exposure to the higher-priced hard luxury sector is helping insulate it from a significant slowdown in aspirational and middle-class consumer spending that is hitting luxury sales at peers. Last week, Burberry issued its second profit warning in three months.
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”This is further evidence that category leaders and self-help stories are diverging,” Bernstein analyst Luca Solca wrote in a note to clients.
The results come weeks after the group scrapped a complex deal to sell loss-making Yoox-Net-a-Porter to Farfetch. Richemont said YNAP “remains an asset held for sale” as it searches for a new controlling shareholder for the loss-making business.
Management sees “a reasonable chance” it will find a buyer within the next 12 months, chief financial officer Burkhart Grund said on a call with investors Thursday, adding that the company has already received unsolicited interest from potential buyers.
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Luxury’s Rebound Is Proving Elusive as China Gloom Adds to Warnings
Richemont SA will offer fresh insight on how luxury companies are coping with a sector-wide growth slump when it reports third-quarter sales on Thursday.
The designer has always been an arch perfectionist, a quality that has been central to his success but which clashes with the demands on creative directors today, writes Imran Amed.
This week, Prada and Miu Miu reported strong sales as LVMH slowed and Kering retreated sharply. In fashion’s so-called “quiet luxury” moment, consumers may care less about whether products have logos and more about what those logos stand for.
The luxury goods maker is seeking pricing harmonisation across the globe, and adjusts prices in different markets to ensure that the company is”fair to all [its] clients everywhere,” CEO Leena Nair said.
Hermes saw Chinese buyers snap up its luxury products as the Kelly bag maker showed its resilience amid a broader slowdown in demand for the sector.