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Swiss luxury group Richemont blamed a weaker economic backdrop and geopolitical tensions as the owner of the Cartier jewellery brand reported weaker than expected first-half profits.

The company, which is also behind the Van Cleef & Arpels brand, said on Friday that sales climbed 6 per cent to €10.2bn in the six months to the end of September, below the €10.34bn forecast by analysts. Net profits in the first half were €1.51bn, short of the €2.17bn forecast.

The group, which is dominated by jewellery and watch brands, is the latest luxury company to report a slowing pace of growth which deepened in recent months as the post-pandemic luxury boom fades. Industry leader LVMH reported sales growth of 9 per cent in its most recent quarter, down from 17 per cent in the previous three months.

Richemont’s growth came under greater pressure in the three months to September 30, falling 2 per cent to €4.9bn and coming in slightly below consensus.

While jewellery sales, Richemont’s biggest division, increased 1 per cent, watch sales fell 11 per cent. Sales in the division that houses the group’s fashion brands, which include Alaïa and Chloe, fell 5 per cent in the second quarter while foreign exchange effects put additional pressure on margins.

“There has been a moderation in demand, which was to be expected, because that’s exactly what the central banks of the world intend. They wanted less demand, and it’s across all asset classes,” said chair Johann Rupert.

“We are gaining market share in jewellery. I’m not saying the total market is growing, but we are outperforming our competitors,” Rupert added.

Richemont shares fell more than 6 per cent on Friday morning to SFr105.70.

By region Europe was hit hardest, with sales falling 1 per cent in the second quarter. The picture was more positive across Asia-Pacific where they were up 8 per cent, while the Americas region reported a 4 per cent increase. Sales in Japan climbed 12 per cent, bolstered by increased tourist spending.

In China, the key growth market for the luxury industry, the recovery from harsh Covid-19 lockdowns that curtailed movement and spending at the end of last year had been more moderate than the rapid take-off some had expected — although Rupert said Chinese tourist spending was a bright spot.

“We had predicted that China’s [recovery] will take quite a bit longer than most of the market analysts and even competitors expected. That’s proving to be correct, though we’re starting to see signs when they travel to Hong Kong, Macau, even Japan, that the market is still there, it is just the feelgood factor is not,” Rupert said.

“In the medium term I’m not worried about our clients having the disposable income. It is just a bit of caution on their side,” he added.

An about 8 per cent miss on operating profit expectations for the first half, which fell 2 per cent to €2.6bn, will “likely lead to high-single-digit per cent downgrades to consensus” for the full year, according to analysts at Citi.

“Richemont joins the ‘moderation club’ in [the second quarter], but with a front-row seat,” said Luca Solca, analyst at Bernstein.

Richemont booked an additional €500mn non-cash writedown on its lossmaking Yoox-Net-a-Porter ecommerce business, adding to €3.4bn in writedowns logged since 2022.

Richemont is in the process of separating the ecommerce business from its core operations after announcing a plan to sell a majority stake in the unprofitable platform to an Emirati investor and online rival Farfetch last year, which received a green light from EU regulators in October.

Farfetch’s share price has plunged more than 80 per cent in the past 12 months. Rupert declined to comment on Farfetch’s performance or the deal, saying “we are positive about what we see at Farfetch”.

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