{"id":9458,"date":"2024-01-19T13:20:50","date_gmt":"2024-01-19T13:20:50","guid":{"rendered":"https:\/\/topat10.com\/?p=9458"},"modified":"2024-01-19T13:20:50","modified_gmt":"2024-01-19T13:20:50","slug":"cartier-owner-richemonts-earnings-may-have-the-bright-spot-that-luxury-companies-have-been-waiting-for-demand-from-chinese-shoppers","status":"publish","type":"post","link":"https:\/\/topat10.com\/?p=9458","title":{"rendered":"Cartier-owner Richemont\u2019s earnings may have the bright spot that luxury companies have been waiting for\u2014demand from Chinese shoppers"},"content":{"rendered":"\n<p>Much of the luxury industry has been starved for good news that could bring it a glimmer of hope about what 2024 will hold. Reports over the last few months of 2023 pointed to a slowdown in consumer spending and, more specifically, in sales of luxury goods. A big reason? China\u2019s lackluster <a href=\"https:\/\/www.reuters.com\/business\/retail-consumer\/why-china-could-become-luxury-industrys-next-sore-spot-2023-07-19\/\" target=\"_self\" rel=\"noopener\" class=\"sc-bd4ab706-0 dXixpY styledLinkColor \">economic recovery<\/a> following the peak of the COVID-19 pandemic, caused in part by of a property market crisis that roiled the country\u2014which is a key source of customers for luxury labels.\u00a0\u00a0\u00a0<\/p>\n<div>\n<p>But results from high-end watch and jewelry brand Richemont point to a sign of respite that the entire luxury industry has been waiting for\u2014that is, the return of Chinese luxury demand.\u00a0<\/p>\n<p>Cartier-owner Richemont saw strong sales in China in the three months to the end of December, it <a href=\"https:\/\/www.richemont.com\/media\/a3qfsf55\/ad-hoc-announcement-pursuant-to-art-53-lr-fy24-q3-trading-update-en.pdf\" target=\"_self\" rel=\"noopener\" class=\"sc-bd4ab706-0 dXixpY styledLinkColor \">reported Thursday<\/a>\u2014the group noted a 25% sales growth in mainland China, Hong Kong and Macau, making it among the strongest markets.\u00a0<\/p>\n<p>\u201cRetail sales increased by 11%, with growth in all regions\u2014with the exception of Europe\u2014and notable strength in mainland China, Hong Kong and Macau combined as well as in the US,\u201d Richemont, which also owns brands like Piaget and IWC Schaffhausen, said in its earnings report.<\/p>\n<p>During the same time <a href=\"https:\/\/www.richemont.com\/media\/uwlpckry\/ad-hoc-announcement-pursuant-to-art-53-lr-trading-update-fy23-q3-en-2.pdf\" target=\"_self\" rel=\"noopener\" class=\"sc-bd4ab706-0 dXixpY styledLinkColor \">last year<\/a>, Richemont\u2019s Asia Pacific sales were down 9%\u2014the company pegged this decline to \u201cChina\u2019s underperformance.\u201d<\/p>\n<p>The boost in shopping activity in China helped Richemont bounce back with a bang, delivering an overall revenue growth of 8% to \u20ac5.6 billion ($6.1 billion) for the three-month period in constant exchange rates.\u00a0<\/p>\n<p>\u201cThere are macroeconomic problems\u2026 but mainland China was double digit positive,\u201d Richemont CFO Burkhart Grund said in a call with analysts on Thursday.\u00a0<\/p>\n<p>\u201cOverall, I\u2019d say the Chinese business is rebuilding,\u201d he said, cautioning that there\u2019s still a long way to go and it can be difficult to plan too much ahead of time. \u201cIn times of, let\u2019s say, economic uncertainty\u2026 it helps to be a highly recognized and highly respected jewelry brand through the power of iconic product lines.\u201d<\/p>\n<h2 class=\"wp-block-heading\"><strong>The curious case of 2024<\/strong><\/h2>\n<p>While it looks like there might be light at the end of the tunnel, the luxury industry might not be safe just yet. China\u2019s economy showed signs of improvement in the first few quarters of 2023, and other metrics like retail sales also pointed to an upward trajectory in consumer spending\u2014which the luxury players have hoped for. However, in 2024, major <a href=\"https:\/\/www.cnbc.com\/2024\/01\/17\/china-2024-gdp-forecasts-by-jpmorgan-goldman-citi-morgan-stanley.html\" target=\"_self\" rel=\"noopener\" class=\"sc-bd4ab706-0 dXixpY styledLinkColor \">banks forecast<\/a> a slower pace of growth than the previous year, along with weak <a href=\"https:\/\/asia.nikkei.com\/Economy\/China-economists-expect-slower-4.6-growth-in-2024\" target=\"_self\" rel=\"noopener\" class=\"sc-bd4ab706-0 dXixpY styledLinkColor \">consumer confidence<\/a> which could pose new challenges when it comes to luxury shopping. That\u2019s a trend <a href=\"https:\/\/fortune.com\/europe\/2023\/12\/25\/luxury-market-slowdown-lvmh-burberry-gucci-lookahead-2024\/\" target=\"_self\" rel=\"noopener\" class=\"sc-bd4ab706-0 dXixpY styledLinkColor \">true of<\/a> other geographies like Europe, too.\u00a0<\/p>\n<p>Some of the industry\u2019s bigwigs are still grappling with macroeconomic volatilities and the impact they are having on consumer demand. Signs of a slowdown <a href=\"https:\/\/fortune.com\/europe\/2023\/10\/11\/bernard-arnault-lvmh-louis-vuitton-second-richest-man-luxury-spending\/\" target=\"_self\" rel=\"noopener\" class=\"sc-bd4ab706-0 dXixpY styledLinkColor \">became apparent<\/a> when French luxury conglomerate LVMH reported a slower pace of sales growth in the quarter to September. A slew of high-end retail brands, including Gucci-owner Kering, have since reported a similar slowdown in spending. Richemont, too, acknowledged the effects of inflation and geopolitical tension on consumer sentiment as it missed analyst expectations in its previous quarter, <a href=\"https:\/\/fortune.com\/europe\/2023\/11\/10\/economic-pressure-cartier-richemont-sales-earnings-luxury-spending\/\" target=\"_self\" rel=\"noopener\" class=\"sc-bd4ab706-0 dXixpY styledLinkColor \">reported in November<\/a>.<\/p>\n<p>Last week, British luxury brand Burberry issued a <a href=\"https:\/\/fortune.com\/europe\/2024\/01\/12\/luxury-trench-coat-burberry-earnings-annual-profit-christmas-sales\/\" target=\"_self\" rel=\"noopener\" class=\"sc-bd4ab706-0 dXixpY styledLinkColor \">profit warning<\/a> after a \u201cdeceleration\u201d in the critical holiday period sales. Although comparable store sales in Mainland China was among the strongest for the trench coat-maker, regions like Europe were still not facing a drop in demand.\u00a0\u00a0<\/p>\n<p>LVMH will report its full-year results for 2023 next week.\u00a0<\/p>\n<\/div>\n<div data-cy=\"subscriptionPlea\">Subscribe to the new Fortune CEO Weekly Europe newsletter to get corner office insights on the biggest business stories in Europe. <a href=\"https:\/\/fortune.com\/newsletters\/ceo-weekly-europe?&amp;itm_source=fortune&amp;itm_medium=article_tout&amp;itm_campaign=ceo_weekly_europe\" target=\"_self\" rel=\"noopener\" class=\"sc-bd4ab706-0 dXixpY styledLinkColor \">Sign up<\/a> for free.<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Much of the luxury industry has been starved for good news that could bring it a glimmer of hope about what 2024 will hold. Reports over the last few months of 2023 pointed to a slowdown in consumer spending and, more specifically, in sales of luxury goods. A big reason? China\u2019s lackluster economic recovery following [&hellip;]<\/p>\n","protected":false},"author":40,"featured_media":9459,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[123],"tags":[],"class_list":["post-9458","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Cartier-owner Richemont\u2019s earnings may have the bright spot that luxury companies have been waiting for\u2014demand from Chinese shoppers | Unlock Informed Choices with Us<\/title>\n<meta name=\"description\" content=\"&quot;There are macroeconomic problems ... but mainland China was double digit positive,&quot; Richemont CFO Burkhart Grund said.\" \/>\n<meta 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Prakash","author_link":"https:\/\/topat10.com\/?author=40"},"uagb_comment_info":0,"uagb_excerpt":"Much of the luxury industry has been starved for good news that could bring it a glimmer of hope about what 2024 will hold. Reports over the last few months of 2023 pointed to a slowdown in consumer spending and, more specifically, in sales of luxury goods. A big reason? China\u2019s lackluster economic recovery following&hellip;","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/posts\/9458","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/users\/40"}],"replies":[{"embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9458"}],"version-history":[{"count":0,"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/posts\/9458\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/media\/9459"}],"wp:attachment":[{"href":"https:\/\/topat10.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9458"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9458"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}