A client passes a jewellery show within the window of a Van Cleef & Arpels luxurious items retailer, operated by Cie. Richemont SA, on by way of Montenapoleone in Milan, Italy.
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With a diamond encrusted ring right here and a uncommon gemstone necklace there, the world’s wealthiest are persevering with to adorn themselves with the best jewellery at the same time as broader luxurious customers pull again.
However make no mistake, one mother-of-pearl bracelet is to not be confused with one other. Because the tremendous wealthy develop much more selective, more and more solely one of the best will do.
That spells optimistic information for Swiss luxurious group Richemont, which boasts a few of the luxurious jewellery market’s most sought-after manufacturers, together with Van Cleef & Arpels, Buccellati and Cartier.
“Richemont’s jewellery manufacturers are actually on the prime of client desirability,” Luca Solca, sector head for international luxurious items at Bernstein, instructed CNBC’s “Squawk Field Europe.”
“There is no debate. Regardless of the efforts by LVMH to problem this management, I believe that different manufacturers are clearly behind.”
Richemont on Friday reported better-than-expected fiscal fourth-quarter gross sales, led by 11% development inside its Jewelry Maisons division. For the complete yr, jewellery was additionally the group’s strongest section, rising 8%.
The outcomes spherical off a outcomes season during which main luxurious names from LVHM to Kering and Burberry reported a slowdown in gross sales within the quarter to March, dashing earlier hopes of a turnaround within the embattled sector.
Gross sales inside LVMH’s watch and jewellery division, particularly, have been flat year-on-year within the first quarter, having declined 2% on an natural foundation in 2024 amid softer demand for key manufacturers equivalent to Tiffany & Co, Bvlgari, TAG Heuer and Hublot.
“We’re gaining market share in jewellery, from branded and non-branded firms,” Richemont’s chairman Johann Rupert mentioned throughout an earnings name Friday.
Watches fall out of trend
Regardless of the continued attract of its jewellery manufacturers, nevertheless, Richemont is just not fully resistant to wider sectoral headwinds.
The efficiency of its Specialist Watchmakers division, which options Piaget and Roger Dubuis, paints a extra nuanced image. Richemont’s watch gross sales fell 13% in 2024, led primarily by weak point in China. That charge of decline eased solely barely within the second half of the yr, due to recovering energy within the Americas.
“The worldwide watch market skilled a slowdown affecting volumes. This was led by demand weak point in China, with higher resilience of high-end worth segments,” the corporate mentioned in its report.
Everyone 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 premium Swiss watchmakers together with Rolex, Patek Philippe and Audemars Piguet, are privately owned, making their efficiency troublesome to decipher.
Macroeconomics apart, nevertheless, Bernstein’s Solca mentioned the basic nature of the luxurious watch market — the place merchandise are sometimes positioned as long-term, if not lifetime, purchases — inevitably makes it sluggish to rebound.
“Everyone and their canine has purchased a be careful of Covid-19 and that can take some time to digest. So I anticipate watches to be on the backfoot for some time longer,” he mentioned.
“Individuals purchase jewellery extra ceaselessly, and jewellery has turn out to be additionally cheaper relative to purses final yr, therefore the higher dynamic in that class.”
Attainable headwinds
The expansion of the high-end jewellery market versus different high fashion staples equivalent to trend and leather-based items may stand Richemont in good stead amid resurging international commerce headwinds.
Richemont’s Rupert mentioned Friday that the corporate wouldn’t take worth will increase that it can not maintain, contrasting warnings of costs rises from other luxury and jewelry players.
Cartier, a unit of Cie. Richemont SA, luxurious watches sit on show in a retailer entrance.
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“The enterprise is more and more reliant on its jewelry arm and can hope the energy of its manufacturers on this space will maintain it,” Russ Mould, funding director at AJ Bell mentioned in a notice Friday.
However, analysts warn that the corporate might but face challenges that threaten market dominance.
“Richemont continues to face a number of important headwinds together with the energy of the Swiss franc towards the greenback, increased gold costs and the influence of tariffs,” Mould added.