Sales slow down for Richemont, owner of Cartier, after Hong Kong downturn and Eu

Posted by sallys on May 26th, 2016

Cartier owner Richemont expects business to remain tough after Islamist attacks in Europe and a downturn in Hong Kong curbed sales growth in the first four months of 2016.
High-end watch makers are grappling with poor demand in Europe, where attacks in Paris and Brussels have deterred tourists, and a downturn in Hong Kong and the United States, two of the world's biggest luxury markets.
"Headwinds are very strong, especially for watches," Chief Executive Richard Lepeu told a conference call on Friday. "The situation has really deteriorated since last November. Before that, the growth engine was definitely Europe, which turned negative (after the attacks in Paris)."
Islamist militants killed 130 people in a spate of shootings and suicide bombings in Paris on Nov. 13 last year, and in March, suicide bombers killed 32 people in Brussels.
Full-year sales fell 1 percent at constant currencies to EUR11.08 billion (HKD96.64 billion), just below a forecast for EUR11.15 billion (HKD97.24 billion) in a Reuters poll. This implied a slowdown in the final quarter. April sales were down 15 percent.
The maker of IWC watches and Van Cleef & Arpels jewellery said Hong Kong and Macau showed no signs of recovery in April. European sales, which had been boosted by tourist shoppers in the first half, turned negative after the Paris attacks, and were still down in April.
Lepeu said the "feel-bad factor" had started to impact the jewellery business, but not to the same extent as in watches.
Many of Richemont's watches cost tens of thousands of US dollars.