Editor’s Note
Richemont’s strong results, driven by resilient demand outside China, offer a cautiously optimistic signal for the luxury sector in 2024.
Swiss luxury group Richemont, the parent company of Cartier, announced revenue that exceeded market expectations. This comes despite the ongoing economic downturn in China, a major market for luxury goods, with sales growth driven by other regions. There is growing optimism that consecutive revenue increases from high-end brands could lead to an improvement in the luxury industry’s performance this year.
According to major foreign media reports on the 16th (local time), Richemont announced that it achieved revenue of 6.15 billion euros (approximately 92.23 trillion won) for the third quarter (October-December) of the 2024 fiscal year. This represents a 10% increase compared to the same period last year, significantly surpassing the market’s expectation of less than 1% growth for Richemont. Richemont owns luxury brands such as Cartier, IWC, Van Cleef & Arpels, and Piaget.
In fact, over half of Richemont’s revenue, 4.5 billion euros (approximately 67.539 trillion won), came from the jewelry division, which saw a 14% year-on-year increase in sales. By region, sales in Greater China (Mainland China, Hong Kong, Macau) decreased by 18% in the third quarter compared to the previous year, while sales in the Americas increased by 22%. Richemont had previously seen a 27% year-on-year decline in revenue in the second quarter of 2024 due to a sharp drop in the Chinese market.
Richemont’s improved performance has led to assessments that the downturn in the global luxury industry may have passed its worst phase. Earlier, on the 13th, Italian luxury brand Brunello Cucinelli, famous for its cashmere sweaters, announced that its revenue last year increased by 12.4% year-on-year to 1.28 billion euros (1.9218 trillion won).
Global investment banks are also presenting positive outlooks. HSBC analysts stated, “We are confident that Chinese consumption has not deteriorated further since the third quarter, while luxury consumption in the U.S. has clearly increased since the presidential election last November.” JP Morgan analysts commented on whether Richemont’s performance improvement is due to its own strengths or a sign of market recovery, saying, “It’s probably a combination of both.”
Some voices suggest that the performance improvement is a story limited to certain high-end luxury brands.