The chairman of Richemont, the Swiss owner of Cartier and watchmakers including IWC and Vacheron Constantin, said inflation is starting to hit luxury demand in Europe.
Persistent higher prices are prompting even well-heeled European consumers to scale back buying, according to Johann Rupert, the leader and controlling shareholder of the luxury conglomerate.
“In Europe, ongoing inflation is starting to impact local demand,” the billionaire South African told shareholders at the company’s annual meeting in Geneva on Wednesday.
Rupert, who controls Richemont through a trust that owns the majority of voting shares, said European households in some countries were spending a higher percentage of income on basic necessities than they had in the past decade.
“We’ve seen the squeeze,” he said.
Richemont shares fell sharply after Bloomberg News reported the comments and after HSBC lowered price targets for Richemont and several other companies in the luxury sector including LVMH, Kering and Prada. LVMH shares declined 3.6% in Paris while Richemont stock fell more than 5% in Switzerland.
The company had warned in July that demand in the US and China, two of the biggest markets for luxury goods, was starting to sputter. Rupert said the good news for European markets was that Chinese shoppers had begun traveling again.
Luxury sales boomed during and coming out of the pandemic as shoppers, helped by low interest rates and pent-up savings, splurged on pricey watches, handbags and jewelery. As central banks have swiftly raised borrowing costs to counter surging prices, Rupert said he expects disruptions to persist.
“We cannot expect that after 10 years of excesses to return to normality in a year or two. It’s going to take longer,” he said.
This news story has been written and carefully fact-checked by an external editorial team. At SWI swissinfo.ch we select the most relevant news for an international audience and use automatic translation tools such as DeepL to translate it into English. Providing you with automatically translated news gives us the time to write more in-depth articles. You can find them here.
If you want to know more about how we work, have a look here, and if you have feedback on this news story please write to english@swissinfo.ch.
External Content
Your subscription could not be saved. Please try again.
Almost finished… We need to confirm your email address. To complete the subscription process, please click the link in the email we just sent you.
Popular Stories
More
Banking & Fintech
UBS releases ‘hundreds’ of staff in fresh wave of job cuts
Should Switzerland take measures to support its struggling industries?
Industrial policies are back in fashion, not only in the United States but also in the EU. Should Switzerland, where various industries are struggling, draw inspiration from such policies?
As a Swiss Abroad, how do you feel about the emergence of more conservative family policies in some US states?
In recent years several US states have adopted more conservative policies on family issues, abortion and education. As a Swiss citizen living there, how do you view this development?
This content was published on
A committee of Switzerland’s House of Representatives has found the people’s initiative to limit fireworks too extreme, but has suggested a counter-proposal.
UN investigators report evidence of crimes in Syria and call for national dialogue
This content was published on
UN investigators in Geneva report ample evidence of crimes in Syria and urge the regime to follow through on its promise of a national dialogue.
Swiss Trade Union warns EU deal could threaten wages
This content was published on
The Swiss Trade Union Federation warns that the new bilateral agreement between Switzerland and the EU could threaten wage protection and public services.
Credit Suisse fines from Mozambique scandal to fund victims’ compensation
This content was published on
The fines imposed on Credit Suisse for the Mozambique scandal will be allocated to a fund for the victims, amounting to $105.5 million.
‘Confederation is a subsidy machine’: Swiss finance minister
This content was published on
The Swiss government is a machine for distributing subsidies to various actors in the country, says finance minister Karin Keller-Sutter.
Lack of funds ends third bid to salvage Säntis ship from Swiss lake
This content was published on
A third attempt to salvage the steamship Säntis, lying at the bottom of Lake Constance in Switzerland since 1933, has failed before it has even begun.
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Five questions about the Swiss price watchdog’s inflation warnings
This content was published on
Switzerland has managed to tame high inflation in the last few months so why is the country’s price watchdog sounding the alarm on high prices?
This content was published on
News of Bucherer's sale to Rolex has stunned the luxury world. The brand has a long history of springing surprises on the industry.
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.