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A consumer passes a jewellery show within the window of a Van Cleef & Arpels luxurious items retailer, operated by means of Cie. Richemont SA, on by means of Montenapoleone in Milan, Italy.
Bloomberg | Getty Images
With a diamond encrusted ring right here and a unprecedented gemstone necklace there, the arena’s wealthiest are proceeding to decorate themselves with the best jewellery at the same time as broader luxurious consumers pull again.
But make no mistake, one mother-of-pearl bracelet isn’t to be puzzled with any other. As the tremendous wealthy develop much more selective, more and more most effective the most productive will do.
That spells sure information for Swiss luxurious team Richemont, which boasts one of the luxurious jewellery marketplace’s maximum sought-after manufacturers, together with Van Cleef & Arpels, Buccellati and Cartier.
“Richemont’s jewelry brands are really at the top of consumer desirability,” Luca Solca, sector head for international luxurious items at Bernstein, informed CNBC’s “Squawk Box Europe.”
“There’s no debate. Despite the efforts by LVMH to challenge this leadership, I think that other brands are clearly behind.”
Richemont on Friday reported better-than-expected fiscal fourth-quarter gross sales, led by means of 11% enlargement inside its Jewellery Maisons department. For the overall 12 months, jewellery used to be additionally the crowd’s most powerful phase, rising 8%.
The effects spherical off a effects season during which main luxurious names from LVHM to Kering and Burberry reported a slowdown in gross sales within the quarter to March, rushing previous hopes of a turnaround within the embattled sector.
Sales inside LVMH’s watch and jewellery department, particularly, have been flat year-on-year within the first quarter, having declined 2% on an natural foundation in 2024 amid softer call for for key manufacturers reminiscent of Tiffany & Co, Bvlgari, TAG Heuer and Hublot.
“We are gaining market share in jewelry, from branded and non-branded companies,” Richemont’s chairman Johann Rupert mentioned all over an profits name Friday.
Watches fall out of style
Despite the ongoing attract of its jewellery manufacturers, on the other hand, Richemont isn’t totally proof against wider sectoral headwinds.
The efficiency of its Specialist Watchmakers department, which options Piaget and Roger Dubuis, paints a extra nuanced image. Richemont’s watch gross sales fell 13% in 2024, led essentially by means of weak spot in China. That fee of decline eased most effective relatively in the second one part of the 12 months, because of improving energy within the Americas.
“The global watch market experienced a slowdown affecting volumes. This was led by demand weakness in China, with greater resilience of high-end price segments,” the corporate mentioned in its record.
Everybody and their canine has purchased a be careful of Covid-19 and that can take some time to digest.
Luca Solca
sector head for international luxurious items at Bernstein
Clouding the image additional, many different top class Swiss watchmakers together with Rolex, Patek Philippe and Audemars Piguet, are privately owned, making their efficiency tough to decipher.
Macroeconomics apart, on the other hand, Bernstein’s Solca mentioned the elemental nature of the luxurious watch marketplace — the place merchandise are normally situated as long-term, if no longer lifetime, purchases — inevitably makes it sluggish to rebound.
“Everybody and their dog has bought a watch out of Covid-19 and that will take a while to digest. So I expect watches to be on the backfoot for a while longer,” he mentioned.
“People buy jewelry more frequently, and jewelry has become also cheaper relative to handbags last year, hence the better dynamic in that category.”
Possible headwinds
The enlargement of the high-end jewellery marketplace as opposed to different high fashion staples reminiscent of type and leather-based items may just stand Richemont in just right stead amid resurging international industry headwinds.
Richemont’s Rupert mentioned Friday that the corporate would no longer take worth will increase that it can’t maintain, contrasting warnings of costs rises from different luxurious and jewellery gamers.
Cartier, a unit of Cie. Richemont SA, luxurious watches sit down on show in a shop entrance.
Bloomberg | Getty Images
“The business is increasingly reliant on its jewellery arm and will hope the strength of its brands in this area will sustain it,” Russ Mould, funding director at AJ Bell mentioned in a word Friday.
Nevertheless, analysts warn that the corporate would possibly but face demanding situations that threaten marketplace dominance.
“Richemont continues to face several significant headwinds including the strength of the Swiss franc against the dollar, higher gold prices and the impact of tariffs,” Mould added.
