Compagnie Financière Richemont SA, behind luxury brands such as Cartier, Chloé and Piage, said today sales for the quarter ended June fell 47% to €1.99 billion due to the coronavirus pandemic.
The Johann Rupert controlled luxury brands group, in a statement, said sales fell significantly across all regions except China, which recorded a strong increase. The firm’s sales increased by 68% in China driven by increased online and offline retail spend and the contribution of the recently opened Cartier flagship store on Tmall Luxury Pavilion.
The company said its overall performance was unprecedented levels of disruption and widespread temporary closures of internal, franchise or multi-brand retail partner stores.
“The pandemic affected regions to varying degrees, depending on the duration of closures, reliance on tourist spending and the ‘feel good factor’ of their domestic clientele. In Europe, sales were 59% lower than in the prior year period, with all markets impacted by public health protection measures, as well as subdued local demand and a lack of international tourism when stores gradually reopened during the quarter. Retail and wholesale sales decreased by 43% and 65%, respectively, due to temporary store closures, severely reduced tourism and generally weak consumer sentiment,” read the statement.
Global demand for personal luxury goods has been steadily increasing for decades, resulting in an industry worth $308 billion in 2019.
However, the insatiable desire for consumers to own nice things was suddenly interrupted by the coming of COVID-19, and experts are predicting a brutal contraction of up to one-third of the current luxury good market size this year.
Fashion firm Burberry yesterday also reported a 45% fall in first quarter sales.
