For the first time since the Great Recession, the luxury market has been trying to navigate one of its worst slumps.
An uncertain global economy and the softening in customer spending have caused many high-end companies to suffer financially due to the continuous slowdown in sales, which have been down-spiraling for the last couple of years.
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Even the most prestigious companies, like LVMH and Kering, have been affected by this almost epidemic-like occurrence. In contrast, others, like Hermés, have managed to stay immune, making this trend inconsistent and its origin hard to pinpoint.
However, a new report might signal the return of the luxury market, giving struggling high-end companies the hope they need to keep their businesses running.
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Cartier is a high-end jewelry brand owned by Richemont, a Switzerland-based luxury goods holding company that owns some of the most highly coveted maisons — a European fashion business — in the jewelry, watch, fashion and accessories sectors.
A logo of Cartier and various luxury watches are displayed in a store’s window.
Richemont published its quarterly sales performance and unveiled unexpected results
On Thursday, Cartier’s parent company, Richemont (CFRUY) published its sales performance for the third quarter ended Dec. 31, 2024. The results were promising, signaling the potential return of a market that has been experiencing one of the roughest financial times caused by constant sales declines.
According to the sales report, sales rose 10% to around 6.2 billion euros ($6.4 billion), setting a record as the company’s highest quarterly sales ever and surpassing analysts’ well-below-expected 1%.
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The successful quarter signaled double-digit sales growth in almost all of Richmont’s regions, including the Americas, Europe, the Middle East and Africa and Japan.
On the other hand, Asia Pacific was the only region that didn’t report positive numbers and instead reflected a negative 7% sales growth, mainly due to the impact that China’s current economic state has had on the sector, which posted a detrimental 18% decline.
Overall sales in Europe increased by 19%, fueled by higher domestic demand and boosted by tourist spending from North America and the Middle East. However, the Americas surpassed any other region’s growth, reporting an astonishing 22% increase.
The unexpected yet positive sales results in the Americas may be an early sign of the recovering U.S. economy since it’s the first time in the last two years that the region has reported growth.
Although China has been the luxury market’s top client for years, spending more money than any other region on high-end goods, luxury companies are now betting more than ever on American shoppers’ spending power to stay afloat.
A thriving maison in a blooming region may rescue the luxury market
Richemont owns four jewelry maisons that are well-known to shoppers worldwide. These luxury brands include Buccellati, Cartier, Van Cleef & Apples, and Vernier.
Although Richemont doesn’t separate its sales by individual brand, the company does split up its maisons, and for the third quarter, jewelry had the highest growth, with a 14% increase overall.
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Luxury jewelry tends to have a higher price tag than any other maison due to the far more expensive materials used in manufacturing, with a single Cartier Classic Love Bracelet costing over $7,000. However, in this case, quality might win over quantity.
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