7 months ago • 2 mins
What’s going on here?
Cartier’s owner Richemont clocked up some bumper results last quarter, reporting record-breaking figures on Friday.
What does this mean?
The luxury sector has been on a roll lately, with LVMH and Hermès each strutting their stuff – and now Richemont, owner of ultra-luxe brands like Cartier and Vacheron Constantin, has gone and joined the party too. The firm thinks China's economic rebound has been one key factor in that success: as restrictions relaxed in the world's second-biggest economy, Richemont's Asian jewelry and watch sales soared, offsetting a slight US slowdown last quarter. The result: a year of record-shattering revenue and profit that trounced expectations. As a cherry on top, the company announced a special dividend and a share buyback program too – sending shares up 6%, to a new all-time high.
Why should I care?
Zooming in: China’s chic customers.
Luxury companies might keep on reaping the rewards of China's reopening. See, while Chinese tourism is slowly picking up, big groups haven't returned in full force – partly due to pricey flights to Europe. And that matters: after all, China’s clothes horses can often bag better deals on their finery in Europe than at home, so Chinese tourism’s a major driver of global luxury sales. And with analysts expecting the country’s tourists to start returning en masse from the second half of this year, luxury might soon be blessed with yet another boost.
The bigger picture: Rich-mont’s richer suitors.
The luxury boom has left firms flush with cash, sparking whispers of potential dealmaking in the space. Richemont's brands have long been seen as takeover targets – with recent rumors hinting at renewed interest from titan LVMH – but the company’s insisting it's not for sale. One thing is certain, though: after a performance like this, any suitors will need some seriously deep pockets to impress Richemont.
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