Richemont posts record sales as China reopens

Luxury goods specialist Richemont reported a surge in annual sales and profits on Friday, as demand in China bounced back.

The Swiss owner of Van Cleef & Arpels, Montblanc, Chloe and Cartier, among others, said sales in the year to 31 March jumped 19% at actual exchange rates, to €19.95bn, a record high, while operating profits surged 34% to €5.03bn.

Luxury brands like Richemont were hit hard by Beijing’s policy of zero-Covid, with stringent containment measures, including rolling lockdowns, weighing heavily on consumer demand.

The policy was abruptly abandoned at the end of 2022, however, and demand has since started to recover.

Richemont said there had been a “significant” increase in sales in the final quarter of the year, boosted by the removal of travel and health restrictions in China. Annual sales in Asia Pacific, its biggest region, rose 6% to €7.94bn.

Johann Rupert, chair, called the results “excellent”, adding: “The group has drawn on the strength of its maisons and the resilience of luxury consumers in an environment characterised by geopolitical volatility, economic uncertainty and high inflation.”

Looking to the current year, Rupert acknowledged economic and political uncertainty remained.

But he concluded: “I am confident that our maisons are well positioned to meet strong demand, notably driven by a significant resumption of Chinese travel.”

As at 1030 BST, shares in Richemont were trading 8% higher.

Victoria Scholar, head of investment at Interactive Investor, said: “[Richemont] is echoing the recent strength of its rival LVMH, demonstrating the resilience of high-end consumers amid macroeconomic headwinds.

"With many at the top end of the income spectrum amassing even greater wealth during Covid, and with China finally unwinding its anti-Covid lockdown measures, luxury giants have stood to benefit.”