Thursday, September 12, 2013

China crack-down on jewellery bribes sees Richemont sales wane




Richemont's revenue growth has slowed in China as a result of more prudent Chinese consumers and a government crack-down on jewellery used as bribes.
Revenue growth in the Asia-Pacific region is waning as China cracks down on the use of watches and jewellery as bribes and illegitimate gifts. (AFP)
Richemont, the world’s largest jewellery maker, reported revenue growth for the first five months of its fiscal year. Thist missed analysts’ estimates on
lower sales in mainland China.

Although revenue growth has slowed, the jewellery-maker remains tops in the industry.
Sales rose 9% in the period through August, excluding currency shifts, the Geneva-based company said today in a statement.

Analysts expected 10% growth, according to the median of 21 estimates gathered by Bloomberg News.
Revenue growth in the Asia-Pacific region, the source of 41% of Richemont’s sales last year, is waning as China cracks down on the use of watches and jewelry as bribes and illegitimate gifts.

Growth in that market was 4% excluding currency effects in the five months, continuing a slowdown in the last full fiscal year and compared with 46% growth a year earlier.

Rise in sales
Sales in Hong Kong and Macau rose in the five-month period and mainland China’s deceleration was mostly due to "prudent consumer sentiment after several years of exceptional expansion," Richemont said.

Total sales increased 4%, compared with the 6%  median estimate of 14 analysts surveyed by Bloomberg.
Full-year revenue rose 14% in the 12 months through March, Richemont said in May when chairperson Johann Rupert also announced plans for a one-year sabbatical following today’s annual general meeting.

Makers of luxury goods have boosted sales as the ranks of the rich expanded. The number of people with assets worth at least $30-million rose more than 6% to a record 199 235 this year, with a combined fortune of almost $28-trillion, according to the Wealth-X and UBS World Ultra Wealth Report.

Richemont reports five-month sales figures each year when it holds its shareholder meeting. The stock has gained 57% in the past year, compared with a 26% gain in shares of Tiffany, the second- largest luxury jewelry maker. –

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