Richmont, the parent company of Cartier, announced revenue that surpassed market expectations. While the economic downturn in China, a major player in the luxury industry, continues, sales have increased in other regions. There are also expectations that continuous sales growth from high-end brands may lead to improved performance in the luxury sector this year.
On the 16th (local time), major foreign media reported that Richmont achieved revenue of 6.15 billion euros (approximately 92.23 trillion won) for the third quarter of the 2024 fiscal year (October to December). This is a 10% increase compared to the same period last year and significantly exceeds the market's forecast of less than 1% revenue growth for Richmont. Richmont owns luxury brands including Cartier, IWC, Van Cleef & Arpels, and Piaget.
The Wall Street Journal (WSJ) noted that "Richmont recorded higher-than-expected revenue in its watch division and key jewelry institutional sector, including Cartier and Van Cleef & Arpels," adding, "The two brands are highly ranked in the jewelry sector, allowing them to compensate for the setbacks in China better than other competitors."
In fact, over half of Richmont's revenue, amounting to 4.5 billion euros (approximately 67.54 trillion won), came from the jewelry institutional sector, which saw a 14% increase compared to the previous year. By region, sales in China, including mainland China, Hong Kong, and Macau, decreased by 18% year-on-year in the third quarter, while sales in the Americas increased by 22%. Due to a steep decline in the Chinese market, Richmont's revenue fell by 27% in the second quarter of 2024 compared to the previous year.
With Richmont's improved performance, evaluations suggest that the global luxury industry has passed its worst phase. Earlier, on the 13th, the Italian luxury brand 'Brunello Cucinelli,' famous for its cashmere sweaters, reported that its revenue for the previous year increased by 12.4% to reach 1.28 billion euros (approximately 1.92 trillion won).
Bloomberg News evaluated that "the achievements of Richmont and Brunello Cucinelli will reassure investors that the worst times for the luxury industry are over." The U.S. economic magazine Fortune assessed, "While it may take some time for the Chinese market to recover, major luxury companies are seeing growth in various regional markets, altering the dynamics. "
Global investment banks are also presenting optimistic forecasts. HSBC analysts stated, "While Chinese consumption has not deteriorated further since the third quarter, luxury consumption in the U.S. has certainly increased since the November election last year." JP Morgan analysts commented that it is likely "a combination of Richmont's own strengths and signs of improvement in the luxury market."
Some voices suggest that the performance improvement is only applicable to certain high-end luxury brands. WSJ observed that "some brands have performed better than others by targeting resilient wealthy shoppers during the economic downturn," while noting, "On the other hand, brands targeting younger and economically constrained shoppers have faced greater impact." Bloomberg News also commented that "Both Cartier and Van Cleef & Arpels illustrate the polarization between brands that continue to excite consumers and those that do not."