Editor’s Note
**Editor’s Note:** Richemont’s Q3 results defy luxury slowdown fears, as surging demand in Greater China offsets European declines and online losses.
The performance of brands under Swiss group Richemont in the third quarter of last year, October-December, seems to contradict analysts’ forecasts of a slowdown in the luxury market in the People’s Republic. China more than compensated for the decline in Europe and losses in the online market.
The super jewelry of Buccellati, Cartier, and Van Cleef & Arpels, brands of Swiss luxury giant Richemont, continue to be highly appreciated by wealthy Chinese, more than anywhere else in the world. Summing up sales in the October-December quarter, the third of the fiscal year, the result is that the Greater China market, including Macau and Hong Kong, recorded a +25% increase, double the already excellent performance of sales in Asia (+13%), and three times the global performance of the group, which still posted a solid +8%, all percentages calculated at constant exchange rates.
In absolute terms, the Swiss luxury goods company achieved sales of €5.59 billion in the three months ending in December, surpassing the €5.4 billion reported last year and beating the €5.49 billion expected by analysts contacted by Visible Alpha. At constant exchange rates, sales rebounded by 8%.
The 13% surge in Asia, where jewelry sales exceeded €2 billion, offset the 3% decline in Europe, where revenue was €1.2 billion, just over half of the Asian business. The Americas contributed €1.3 billion with an 8% increase, again at constant exchange rates.
Sales of jewelry maisons grew by 6% to €3.95 billion, representing Richemont’s core business. The group is also active in specialist watches and luxury accessories, sectors that declined by 1% and 4% to €939 million and €702 million, respectively.
Interestingly, the group’s two main sales channels, retail and wholesale, performed well, especially the retail channel, particularly in China, which accounts for nearly 80% of the business, totaling €3.9 billion. Online sales declined by 5%, understandably given the value of the items.
In the nine months of last year, Ynap (Yoox Net a Porter), Richemont’s platform that incorporated Italian Yoox, once considered the top of luxury e-commerce, lost over 11% in sales and proved to be the Swiss group’s worst deal. However, accumulated losses did not dent the group’s cash position, which reached a record €6.8 billion at the end of December.
A signal of the resilience of the luxury goods market in the People’s Republic also comes from supercar sales. Lamborghini, a brand of the Volkswagen group, confirmed China as its third global market in 2023, after the United States and Germany.