The CEO of Cartier told Bloomberg it will be toning down some of its marketing in response to the sharp increase in the cost of living.
Richemont Chairman Johann Rupert is warning of an uncertain and potentially unsettled future, even as luxury sales continue to grow by double digits.
“It is highly uncertain how the political, economic and social landscapes will evolve in Europe and in our other key markets,” he said. “We only know that we will likely face volatile times ahead as central banks seek to rein in inflation while governments try to manage severe cost-of-living pressures.”
Rupert’s remarks came Friday [November 11], as the luxury conglomerate he heads reported overwhelmingly positive results for the first half of the fiscal year, with sales of jewelry and watches particularly strong.
In the six-month period ended Sept. 30, Richemont’s sales grew 24 percent (16 percent at constant exchange rates) to €9.68 billion ($9.98 billion).
Operating profit was up 26 percent to €2.72 billion ($2.80 billion).
Retail sales, meaning sales made through Richemont-owned and -operated stores, drove the growth and now account for 67 percent of the company’s total sales.
They rose 21 percent at constant exchange rates in the first half of the year, while online sales were up 9 percent and wholesale increased 6 percent.
Sales by the company’s jewelry brands—Buccellati, Cartier, and Van Cleef & Arpels—grew 24 percent year-over-year in the period (16 percent at constant exchange rates), while watch sales climbed 22 percent (13 percent at constant exchange rates).
Richemont said all product categories in jewelry did well, noting specifically the strength of the brands’ “iconic” collections, e.g., “Clash,” “Trinity” and “Tank” watches for Cartier and “Alhambra” and “Fauna” for Van Cleef.
While jewelry sales continue to shine for Richemont, the company is approaching the holiday season with sensitivity, trying not to appear out of touch amid cost-of-living pressures and the ongoing war in Ukraine.
Cartier CEO Cyrille Vigneron told Bloomberg the brand is creating a “more subdued” marketing campaign for Europe and possibly the United States this holiday season.
Classic collections also drove sales among the company’s eight luxury watch brands, a list that includes Baume & Mercier, IWC, Jaeger-LeCoultre, and Vacheron Constantin.
