Richemont feels the pain as China contains appetite for luxury
A dip in Chinese luxury demand has lead to a drop in the luxury goods group’s share price
Shares in Richemont fell sharply on Friday after the Swiss luxury-goods group signalled that sales growth had stalled in September, adding to fears of ebbing Chinese luxury demand. Richemont said growth had fizzled out towards the end of the six months to the end of September, which it blamed on setbacks in the Asia-Pacific region. The admission fuelled fears of a drop in Chinese demand for luxury goods amid global trade tensions which have hit the shares of other luxury groups such as France's LVMH and Tiffany in the US. By lunchtime in Zurich, Richemont's shares were down 7% at SFr68.64 (R972), and about 25% lower than a year earlier. "The market is extremely nervous. When you get this 'end of cycle' in luxury, stocks will be a lot more volatile," said Jon Cox, equity analyst at Kepler Cheuvreux in Zurich. He said, however, he did not believe the slowdown would be as severe as that which followed the clampdown on "gifting" by Chinese authorities. Richemont said sales rose 8% at co...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.