Despite a very dynamic end to 2023 in China, Hong Kong and Macau, where sales jumped 25% over the period from October to December, Swiss luxury heavyweight Richemont confirms that it is not immune to the lukewarmness of the Chinese market. The group known for its Cartier jewelry, Van Cleef

The markets particularly welcomed the publication of the Swiss jeweler and watchmaker (5.3% for Richemont shares on Friday, to 144.75 Swiss francs). With a record annual turnover of 20.6 billion euros, an increase of 8%, the group compensated for this weakness thanks to its other markets, particularly in the United States. But he was very cautious about the outlook in China, which accounts for around 20% of its sales, according to Zuercher Kantonalbank. “As we predicted, a lasting rebound in Chinese demand will take time,” underlines the group.

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After a very strong rebound in the local market at the end of 2022 and the beginning of 2023, at the end of the strong restrictions linked to Beijing’s zero Covid policy, consumer euphoria quickly subsided in 2023 in the Middle Kingdom. Enough to dampen the optimism of players in the sector about a lasting recovery.

In mid-April, the world leader LVMH reported for its first quarter of 2024 an increase in its turnover limited to 3%, under the effect, among other things, of “a normalization” of Chinese consumption. A month earlier, its challenger Kering threw a wrench into the pond by warning that weak demand in the country would cause sales at its Gucci storefront to drop by 20%. Since then, other players (Salvatore Ferragamo, Burberry, etc.) have confirmed having suffered in China.

“For decades, sales of luxury products have been closely linked to consumers’ feelings of well-being,” recalls Johann Rupert, president of Compagnie Financière Richemont. However, two years ago I explained – and this had also made me very unpopular with our competitors who had seen their stock price plunge by 15% – that it would take longer for this feeling to feel good. return to China. We also said that we should not rush into thinking that the Chinese consumer would come back straight away. And that turned out to be the case, as the lockdown left a big impact and the Chinese are still recovering. »

Little known for his excessive optimism in his comments on the market, the leader does not, however, question the medium-term potential of the Middle Kingdom. With 1.4 billion inhabitants and the emergence of a middle class, it offers a number of opportunities, according to the South African billionaire.

“In the medium term, I completely believe in China,” he insists. The Chinese consumer is intelligent. He studies and he works. And I don’t think his desire to consume luxury will stop. Besides, if we think in purely economic terms, the number of inhabitants in mainland China is enormous, with many people working very hard and being successful. There is no reason to believe that when the feeling of well-being returns to China, it will not show in the numbers. »

In the meantime, the group is counting on the performance of surrounding countries to act as growth drivers. “Indonesia, Thailand, the Philippines, these are very large markets that are doing very well economically,” adds the manager. The United States also grew significantly in the last quarter, becoming the Cartier owner’s largest market.

The world leader in jewelry has initiated changes to its governance. While Yohann Rupert’s presidency had taken a more executive turn during the Covid turbulence, the group is strengthening the position of general manager, until then occupied by Jérôme Lambert. On June 1, it will be entrusted to Nicolas Bos, current boss of Richemont jeweler Van Cleef.

A sign of a passing of the baton within the group closely linked to its president and majority shareholder? “I am not withdrawing,” tempers Johann Rupert, 74 years old. According to him, the new organization aims to delegate financial management and return to a more traditional management structure after the tumults of the pandemic.