Richemont, Owner of Cartier, Notes Inflation Impacting European Luxury Demand
Johann Rupert, chairman of Richemont, the Swiss luxury conglomerate behind iconic brands such as Cartier, IWC, and Vacheron Constantin, acknowledges the growing impact of inflation on the demand for luxury goods in Europe.
Persistent price increases are prompting even affluent European consumers to curtail their luxury spending, Rupert revealed. Speaking at the annual meeting in Geneva, the billionaire South African emphasized the observable effects of inflation on luxury consumption.
Rupert, who exercises control over Richemont through a trust holding the majority of voting shares, pointed out that European households are allocating a larger proportion of their income to essential necessities, a shift from the past decade.
In July, the company had already issued a caution regarding diminishing demand in the United States and China, two of the largest luxury goods markets. However, Rupert noted a positive development for European markets, with Chinese shoppers resuming their travels.
The luxury sector witnessed a surge in sales during and after the pandemic, as consumers, buoyed by low interest rates and accumulated savings, indulged in high-end watches, handbags, and jewelry. Nevertheless, with central banks responding to soaring prices by rapidly raising borrowing costs, Rupert anticipates continued disruptions.
«We cannot expect a swift return to normalcy after a decade of excesses. The process will be protracted,» he remarked.
