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Richemont has reported a surprise sales decline in the US / Image source: Adobe
  • Richemont sales boosted by China rebound
  • But US sales unexpectedly decline
  • China GDP data weighs on sentiment

Luxury goods stocks were on the slide on Monday following weaker-than-expected gross domestic product figures from China, the world’s second biggest economy and a massive market for bling, which came in at 6.3% for the second quarter against the 7.3% called for by consensus.

Also weighing on sentiment towards the sector was a negative read-across from Richemont (CFR:SWX), the Swiss luxury goods group, which posted a surprise decline in sales from the Americas.

This heightened concerns over a slowdown in luxury demand in the important US market and sent Richemont’s shares down 7.9% to CHF 141.9.

LVMH (MC:EPA) fell 3.4% to €862.2 in sympathy, while Hermès (RMS:EPA) was off 3.2% at €19.33 and Burberry (BRBY) traded 1.3% lower to £21 on the news.


Cartier-to-Van Cleef & Arpels owner Richemont posted a 14% jump in overall sales to €5.32 billion for the quarter ended 30 June 2023.

This was below market expectations despite a strong 32% sales rebound in Asia Pacific as activity in mainland China, Hong Kong and Macau picked up following the lifting of Covid restrictions.

However, Richemont also reported ‘muted’ sales in the Americas, where revenues dipped 4% due to lower wholesale revenues and flat year-on-year retail sales.

Back in May, Richemont’s chairman Johann Rupert had indicated the US, which has been a major driver of spending for the last three years, was at risk of a downturn.

During the quarter, Richemont’s jewellery sales grew by a sparkling 19%, while its specialist watchmaker division generated sales growth of 6%, slightly below consensus estimates.

On 14 July, British luxury brand Burberry reported a good start to the year with like-for-like retail store sales up 18% in the first quarter to 1 July, boosted by a strong recovery in mainland China.

Unfortunately, the performance in the Americas remained weak with sales down 8% as the low end of the luxury market weakened across the pond.

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In quarter-on-quarter terms, China’s economy only grew 0.8% in April through June, slowing from the 2.2% growth seen in the first three months of 2023.

Further data from China also pointed to a slowing in retail sales growth in June, which was read as negative for the luxury sector, while youth unemployment hit a record high.

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Issue Date: 17 Jul 2023