Cartier owner Richemont said on Tuesday its quarterly sales in China fell 27 percent, as deepening economic distress in the world’s second-largest economy hits luxury firms.
The Swiss luxury group said total sales fell 1.0 percent to 5.27 billion euros ($5.74 billion) in the first quarter ended June 30, thanks to growth in the Americas, Japan and Europe.
However, sales in the Asia Pacific region excluding Japan — Richemont’s top sales region — fell 19 percent to 1.8 billion euros and 27 percent in China, Hong Kong and Macau.
“The decline reflects both low consumer confidence and strong comparatives ranging from double-digit growth in the mainland to triple-digit growth in Hong Kong and Macau in the year-ago period,” the company said in a statement.
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Data released on Monday showed China’s economic growth slowed to 4.7 percent in the latest quarter ended June 30, while retail sales growth fell to 2 percent in June.
China has become a key market for luxury companies in recent years thanks not only to its growing ranks of millionaires but also to its expanding middle class. But a real estate crisis and a slowdown in overall economic growth have frozen luxury spending.
Burberry replaced its chief executive on Monday as it tries to curb “disappointing” sales, including a 21 percent drop in comparable-store sales in mainland China in the latest quarter.
Meanwhile, Swiss watch group Swatch, which owns a number of luxury brands including Omega, reported a “sharp decline in demand for luxury goods in China”.
Richemont’s quarterly performance was bolstered by its main jewelery division, which saw growth two per cent higher, while sales of its specialist watchmakers fell 14 per cent.
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Japan saw the biggest percentage increase in sales, up 42% to 603 million euros.
Sales rose 11 percent in the Americas to 1.2 billion euros and added four percent in Europe to 1.2 billion.
Source: AFP