Cartier warns of luxury slowdown
The owner of the brand says sales growth missed forecasts, singling out China as a particular problem, and gives a cautious outlook.
Apparently some of the rich are taking a step back from conspicuous consumption, with the owner of the Cartier and Montblanc brands giving a cautious outlook after reporting disappointing sales growth.
The downbeat report from Cie. Financiere Richemont SA (CFR) comes after other luxury goods makers reported disappointing results. Shares of Tiffany (TIF) took a dive earlier this month after disclosing ho-hum holiday sales and cutting its earnings outlook.
Richemont, based in Geneva, Switzerland, said sales rose 9% during the past three months of 2012 -- down from a 24% jump a year earlier. With demand for luxury items such as Cartier's $53,200 diamond-studded panther necklace slowing, the sales numbers missed analysts' expectations.
The culprit doesn't appear to be America's 1%, however. Richemont blamed a slowdown in Asia, and singled out China as a particular problem.
"At this stage, it is unclear how business patterns may develop and how the business in the Asia Pacific region will evolve in the near future," the company said in a statement.
Luxury sales might improve along with China's fortunes, however. The country's economic growth recently accelerated for the first time in two years, according to Bloomberg, citing data released by Beijing's National Bureau of Statistics.
But the Chinese are also getting more discerning, and not all diamond-studded products are going to wow consumers there the way they used to, Neev Capital founder Rahul Sharma told CNBC.com.
"It used to be that you just put up a store in China and you won, now the Chinese consumers themselves are being quite choosy in terms of the brands they like -- they like iconic stuff," he said.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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