Switzerland-based luxury goods group Richemont saw sales flatten out in Asia in the six months to September as China’s austerity bite continued to have an impact on the watches and jewellery sectors.

 

The company – whose brands include Cartier, Montblanc, Lancel and Alfred Dunhill – generated just +1% growth in sales (+4% at constant exchange rates) whereas in the same period last year the growth was +22% (+9% at constant rates).

 

At constant rates Asia was, by far, the slowest of Richemont’s four regions, with Europe/Middle East up by +10%, Americas +17% and Japan +18% (see chart below). Average growth at constant rates was +9% to reach €5.32bn ($7.2bn).

 

Asia Pacific accounts for 40% of the company’s sales, followed by Europe/Middle East at 37%, Americas 15%, and Japan 6%.

 

 

Commenting on Asia, where Hong Kong and mainland China are the two largest markets, Richmont says: “Asia Pacific was led by good growth in Hong Kong and Macau, offset by lower sales in mainland China, largely reflecting prudent consumer sentiment after several years of exceptional expansion.”

 

That sentiment – partly a result of a Chinese government clampdown on extravagant luxury goods spending and ‘gifting’, particularly when it comes to watches – has affected Richemont’s performance in the region for more than a year.

 

In other regions, the picture was brighter with sales in Europe/Middle East being driven by tourist spending; sustained momentum of jewellery sales in the Americas, also helped by the October 2012 acquisition of Peter Millar; and strong domestic consumption boosting Japan.

 

MONTBLANC WEAK

Among Richemont’s business areas, the jewellery and watchmaking divisions turned in strong sales performances of +8% and +13%, while the ‘other’ division, consisting mostly of fashion/accessories brands was up +12% at constant rates (see table below). Montblanc however generated just +1% growth and showed a -55% fall in operating contribution, whereas the result group-wide was +1%.

 

 

For the full group results see below.