Dear Westerners, Hong Kong is no longer a safe place for business, the son of dissident Emily Lau reiterated this morning. But the big names in luxury probably don't think so, starting with the Swiss champions of fine watchmaking. The crises of recent years, from umbrella revolt of students atpandemic embargo they now belong to the past. In the first three months of 2023, the former British colony almost completely recovered its role queen of hard luxury. The sales of the big names in the high quality watchmaking they shot up in the first quarter by 62%, to 262,9 million francs, again overtaking the rest of China (259 million). In short, Chinese buyers have resumed their old habits. And it doesn't take long to foresee that soon the island (favored by a certain fiscal opacity) will once again overtake the United States, which in any case, with a 42% increase in sales, confirms the excellent state of health of the sector.
Luxury: Richemont clears the Zurich Stock Exchange, protagonist of the day
It is in this context that Richemont's excellent quarterly performance, +7% on the Zurich stock exchange after having celebrated thesales increase of 22% (at constant exchange rates) which have allowed the Geneva-based fashion house controlled by the South African tycoon Johann Rupert to overcome the 5 billion turnover barrier. A push that it has dragged on all the luxury stocks on all the Stock Exchanges Europe: Moncler, Ferrragamo and Tod's advance in Milan, but Lvmh and Kering also lengthen the pace. What is responsible for the leap forward?
Richemont pushes luxury into the stock exchanges thanks to Chinese purchases
The credit goes to the wealthy customers of Shanghai (but also of Los Angeles or via Montenapoleone) who have resumed queuing in the shops of Cartier need Van Cleef & Arples. But also to enthusiasts who make exclusive purchases through Yoox Pret a Porter, the online luxury store founded by Federico Marchetti and sold (at a high price) to the Richemont empire. At the time of the operation, not a few analysts turned up their noses, going so far as to foresee the decline of the group. But Rupert, a wealthy gentleman who divides his time between the vineyards on the hills overlooking Cape Town and the administration of a leading group in timepieces but also in jewels and accessories (Mont Blanc), has solid shoulders.
The billionaire, defined as "the Bear" for his reluctance to be interviewed, has not yet given in to advances by Kering for a joint venture in some sectors or even less to those of Bernard Arnault who repeatedly probed him for the possible purchase of Cartier, the last temptation for “the wolf in cashmere”. “It is very difficult – comments Luca Solca, leading analyst of the Lucca sector – that after these numbers Rupert gives in to the temptation to sell”. “Also because – adds Vontobel analyst Jean Philippe Bertschy – the market trend is towards polarisation. Stronger brands tend to expand. And it is increasingly difficult for others to enter the club of the most sought-after names”.
A hundred of these days, Mister Rupert.
Richemont +7% beat expectations thanks to strong demand for jewelry and watches by Chinese consumers. Sales increased 22% at constant rates. Operating profit hit $5,03 billion, much better than the consensus estimate of $4,82 billion.
