Richemont hit by Chinese luxury slowdown

Chinese women walk past the Cartier store on June 11, 2012 in Beijing, China. (GETTY IMAGES)

Richemont, the Swiss giant behind Cartier watches, has become latest luxury group to be hit by sales growth slowdown as demand in China wanes.

Richemont, which also owns jeweller Van Cleef & Arpels and fashion labels such as Chloé, revealed the slowest start to its year since 2009.

Sales rose just 1 per cent in the five months to the end of August, missing analysts’ expectations, with organic growth up 4 per cent before taking into account exchange rates.

Its watches division was hit by the crackdown on gift giving in China and political instability in Hong Kong, and an apparent slowdown in tourist spending may have also hurt the group. Richemont’s sales in Asia-Pacific were flat and its strongest market was the Americas where sales rose by 12 per cent.

Meanwhile, the latest statistics from tax refund specialist Global Blue found tourist spend in Europe — including London — was down 2.5 per cent year on year for July and August. Experts have blamed the slowdown on unrest in Russia and Ukraine and strong sterling.

Laura Levy, a luxury analyst at Barclays, said Russian tourism spending in Europe was in double-digit decline, down 13.4 per cent in August.