Swiss luxury house Richemont, owner of high-end brands including Cartier, Chloé and Can Cleef & Arpels, continues to feel the strain of historically low demand for luxury goods in the important Chinese market.
Revenues of €10 billion in the first half of its financial year were down 1% at actual rates, while operating profit fell 17% to €2.2 billion.
Asia-Pacific was the worst-performing region, largely due to persistently low demand for luxury items in China.
Poor Chinese demand has been a two-year headwind for the luxury sector as a whole, with LVMH, Gucci owner Kering and British fashion house Burberry Group PLC (LSE:BRBY) all seeing their profits strained.
A double-digit increase in Richemont’s sales in Malaysia and South Korea was not nearly enough to offset plummeting Chinese demand in the first half, with total APAC sales falling by 18%.
Sales were up 5% across Europe, 11% across the Americas and 42% in Japan.
Richemont also cautioned of higher raw material costs, particularly gold, which soared to an all-time high in the reporting period.
Richemont’s share price dipped 4.2% this Friday.