Richemont’s  growth worries fuels fears for China demand

After the Swiss luxury goods group Richemont’s shares fell sharply yesterday, they said  that growth had fizzled out towards the end of September, and blamed on setbacks in the Asia-Pacific sector.

The confession fuelled fears of a drop in Chinese demand for luxury goods amid global trade tensions, which have hit the shares of other high-end groups such as Tiffany in the US and LVMH in France.

 The market is extremely volatile and the slowdown is a direct result of clampdown on “gifting” by Chinese authorities.

Although Richemont’s sales rose 8 per cent at constant exchange rates in the half-year, excluding its recent ecommerce acquisitions.

Burkhart Grund, Richemont’s finance director said that September’s sales in most regions had been “more or less in line with the previous month’s trend. However, Asia-Pacific had been hit by severe weather conditions that had forced store closures in Hong Kong and deterred tourism.

Earlier this year Richemont took full  control of Milan-based online retailer Yoox Net-a-Porter and also bought Watchfinder, an online and shop-based retailer of “ preowned” luxury watches.

Including the acquisitions  the total sales were up 21 per cent at €6.8bn in the six months compared with € 5.6bn in the same period last year.

South African born entrepreneur, Johann Rupert, Founder and chairman of  Richemont  has pushed to overhaul the group’s sales channels, and announced last month a joint venture with Chinese ecommerce giant Alibaba.