Richemont’s Specialist Watchmakers, grew worldwide sales by 10% at constant exchange rates between April and June, the group has reported in its latest financial statement.
Direct to consumer sales through branded boutiques or online accounted for almost 60% of turnover for the watchmakers.
“Most” brands grew sales, Richemont reports, with noteworthy outperformances from A. Lange & Söhne, Jaeger-LeCoultre, Piaget and Vacheron Constantin.
The remaining watchmakers in the division are IWC, Baume & Mercier, Panerai and Roger Dubuis, which is currently recruiting for a new CEO.
Richemont’s Jewellery Maisons: Buccellati, Cartier and Van Cleef & Arpels, grew faster than watchmakers with revenue up 24% thanks to both robust jewellery and watch sales.
Sales improved in all regions except the Americas where sales were broadly flat.
That geographical pattern was common across group sales, with sales to the Americas down by 2%, year-on-year.
Asia Pacific posted the strongest growth, with a 40% rise thanks to favourable prior-year period comparatives when China and Hong Kong were still facing strict covid restrictions.
GDP data out today showed year-on-year growth in Mainland China of 6.3% in Q2, but quarter-on-quarter growth was just 0.8%, down from 2.2% in Q1.
“The data suggests that China’s post-covid boom is clearly over,” Carol Kong, economist at Commonwealth Bank of Australia in Sydney, told Reuters this morning. “The higher-frequency indicators are up from May’s numbers, but still paint a picture of a bleak and faltering recovery and at the same time youth unemployment is hitting record highs.”
Concerns over the slowdown in growth for the Chinese economy may have affected investor sentiment in Richemont, which has seen its share price fall by over 8% in this morning’s trading.
Richemont’s European sales rose by a healthy 11%. Middle East & Africa was up 15% and Japan improved by 14%.
No mention was made in Richemont’s financial report about the relative performance between the UK, where VAT rebates for tourists are not available, and mainland Europe where the effective 20% discount is still on offer.
While Richemont continues its direction of travel towards selling more direct to consumer, its wholesale business has also grown by 11% in the most recent quarter.
Across the group, direct-to-client sales now account for 74% of turnover.
Aren’t these rises due to inflation?
Richemont doesn’t provide this detail, but there is certainly evidence that the average transaction value is rising in the Swiss watch export figures, which show falling volumes and rising values.