Revenue from Richemont’s jewelry brands was strong in the first fiscal half even as the company’s overall sales fell due to a slowdown in China.
Sales from the company’s jewelry maisons — Cartier, Van Cleef & Arpels, and Buccellati — rose 2% year on year to EUR 7.09 billion ($7.6 billion) for the six months that ended September 30, the luxury giant reported Friday.
Strength in some regions, primarily the Americas and Japan, helped offset extreme weakness in Asia Pacific, specifically China. Revenue for the segment was lower than during the same period a year ago, when Asia benefited from a rebound after a prolonged Covid-19 shutdown. The strong price of gold this year also led to higher raw-material costs, Richemont explained.
“Richemont demonstrated sustained resilience against a challenging macroeconomic and geopolitical backdrop,” said Richemont chairman Johann Rupert. “Benefiting from the group’s balanced geographic mix and continued strength at our jewelry maisons, sales from continuing operations were stable at constant exchange rates.”
Operating profit at the jewelry houses was down 5% to EUR 2.33 billion ($2.5 billion). The company attributed the drop in profitability to higher raw-material costs, particularly that of gold, which outweighed limited price increases for jewelry products, it noted.
While Richemont acquired Italian jeweler Vhermier during the period, the maison’s revenue was not included in the company’s total.
Sales at specialist watchmakers, including Piaget and Vacheron Constantin, slid 17% to EUR 1.66 billion ($1.78 billion), while operating profit from the segment plunged 59% to EUR 160 million ($171.6 million).
Group revenue fell 1% to EUR 10.08 billion ($10.81 billion), with operating profit down 17% to EUR 2.21 billion ($2.37 billion).
“In the first half of this fiscal year, we continued to deliver sustained resilience in a world where uncertainty has become the norm,” Rupert added. “Chinese demand…will take longer to recover and is particularly affecting our specialist watchmakers.”
Image: A Van Cleef & Arpels store in New York. (Shutterstock)
Stay up to date by signing up for our diamond and jewelry industry news and analysis.
