China’s Appetite For Jewelry & Watches Proves Critical For Richemont

Richemont’s Portfolio Includes Cartier, Vacheron Constantin, Piaget, Jaeger-LeCoultre And Montblanc

Richemont-owned Montblanc is expanding rapidly throughout mainland China

Richemont-owned Montblanc is expanding rapidly throughout mainland China

Steadily growing demand in mainland China, Hong Kong, and the broader East Asia region continues to be a bright spot for the Swiss luxury group Richemont, owner of such brands as Cartier, Shanghai Tang, Piaget and Montblanc. As the AFP reports today, Asian demand — led by the Greater China region — helped Richemont sales rise sharply in the third quarter of 2011.

In total, global sales grew to US$3.3 billion in Q3 2011, a 24 percent increase over the same period in 2010. This growth saw revenue from the Asia-Pacific region, at US$1.39 billion, pull further ahead of Europe and North America, which came in second and third with $1.15 billion and $483 million, respectively.

As Richemont executive director Johann Rupert said in a company statement this week, gains in Asia were mainly driven by demand from Hong Kong and mainland China.

From the AFP:

Like its rival Swatch, which generated sales of 7.0 billion Swiss francs ($7.33 billion, 5.8 billion euros) in 2011, Richemont took advantage of a craze for Swiss watches.

Overall Swiss watch exports are expected to hit a record high in 2011 but the gains this year are forecast by the Fondation de la Haute Horlogerie industry group at about 5.0 percent.

Among European luxury giants like LVMH and PPR, Richemont seems to be particularly well-placed to take advantage of broader Chinese consumer trends in 2012. With more wealthy mainland Chinese turning to the more discreet status symbol, Richemont’s Montblanc, with its small accessories and pens, should see significant gains this year in China, as should watch brands in its portfolio like Baume & Mercier which — despite its reputation in North America and Europe — doesn’t have the same high profile in mainland China as Omega, Rolex or Vacheron Constantin.


Hard Luxury