By geography, Richemont sales in the Americas were up 20% in Q2, Europe was up 11%, Asia-Pacific increased by 10%, Japan rose by 10%, while the Middle East and Africa was up 22%.
“ You will recall a few years ago when there was general hopefulness that China would recover quickly, I noted caution, so the share price dropped — but it’s proven to be correct now. We believe that the Chinese clientele are becoming more selective and it may remain so even upon a full recovery, which we are happy about,” Richemont chair Johann Rupert told reporters.
The company noted a return to growth in China, Hong Kong and Macau in the second quarter, led by the jewelry maisons, but Rupert remains cautious: “The downtrend has changed, so we are seeing some early signs. But I wouldn’t say that they are green shoots of recovery.”
Bos noted a shift from the YOLO (you only live once) to the YONO (you only need one) mentality. “ It’s an anecdote that’s part of the conversation in Korea and China, but I think it applies to a lot of countries. YOLO was referring to the idea of instant gratification. And it has evolved toward what they call the YONO, which is in a way that they still buy, but they buy with a much more discerning eye,” he explained. “[For YONO buyers,] the interesting quality of the product, the investment or the long-lasting value really play a role. This is something that we truly see particularly for jewelry. The clientele — which is very demanding and very discerning — understands the long-term quality and value of our collections. It has been really a driving force these past few years behind the success of Richemont.”
The 39% tariffs imposed by the US on Swiss imports since August have been a blow to the Swiss watch industry. Asked for an update about the negotiations, Rupert said: “We did not negotiate in the White House. You negotiate if you have aircraft carriers, when you buy millions of tons of soybeans, that’s called negotiations. I think you’ve got to wait for the Swiss representation. They’ve been there this week. We believe that they’re doing a very good job, but we are merely businesspeople and we did not negotiate, we didn’t have a mandate to negotiate. That’s the Swiss government’s job, but I think there are signs that the misunderstanding has been cleared up.”