Swiss luxury group Richemont has issued another profit alert, because the luxury watch industry has stagnated once more in the first half of its new fiscal year. Its turnover has already taken a huge hit.
Unfavourable climate
Richemont, Cartier, Montblanc and Chloe’s parent company, saw its turnover drop 14 % in the first five months of its fiscal year and it expects a 45 % operational profit drop in the first half of the year. ”We are of the view that the current negative environment as a whole is unlikely to reverse in the short term“, the company said in a statement. It suffers from disappointing European results, mainly in France, which welcomed fewer tourists after the terrorist attacks.
Continental China and South Korea managed growth, but Hong Kong and Macau are still troublesome regions for the luxury industry. Japanese turnover also dropped because of the strong yen, which impacts tourist expenditure.
North and South America also suffered turnover drops, but not as badly as in other regions. The United Kingdom even experienced turnover growth, because of its weakened local currency.
