Richemont Sales Climb on China, US Demand for Watches, Jewelry

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Transcript

00:00I mean, basically, Richemont is going from strength to strength.

00:04This year, it's been a very difficult year for luxury groups.

00:10There's been a downturn, you know, in China.

00:12Consumers in China have not been buying.

00:15There were worries there.

00:16The U.S., you know, there were worries about the U.S. tariffs.

00:21And actually, what we saw with Richemont is that they weathered that downturn very well.

00:27The shares here today are up, I think, by more than probably today, 20%.

00:32Today, as you said, they're up 8%.

00:35And that's because they're very exposed to hard luxury, to Cartier, to Van Cleef.

00:40And actually, in these times of uncertainty, consumers deem this category as probably more resilient

00:46and as a better store of value compared to, you know, pricey ready-to-wear or pricey handbags.

00:52So, it's been, yeah, very, very positive overall.

00:57Yeah, across all regions as well.

01:01Angie, tell me about the tariff story.

01:04And what does Richemont think about it?

01:05Richemont, the big CEOs of the big luxury companies have had a big impact on this tariff story over the last few weeks.

01:11And I'm really curious to get kind of their take on what is happening here.

01:15So, what did they have to say?

01:16And what was interesting with Richemont is actually in the second quarter, the Americas was actually the strongest region.

01:26They grew 20%.

01:27So, despite the announcement of this tariff of 39%.

01:32So, actually, Switzerland was slapped with a 39% duty from the U.S. administration.

01:37That was the highest tariff on any developed country.

01:40But in recent weeks, there's been talks, as you say, you know, like a few top executives and billionaires of Switzerland.

01:47They went to the Oval Office.

01:49They met with Trump.

01:50They're trying to make a deal.

01:51And it sounds like we're on the right track.

01:53It sounds like Switzerland could now have a tariff of about 15%, which would be on a par with the rest of the EU.

02:01And that would be very helpful.

02:03However, what we saw with Richemont is that they have a lot of pricing power.

02:09Johan Rupert, the chairman of Richemont, has said that they haven't applied, you know, the gridflation.

02:16Other brands following the post-pandemic, they got ahead of themselves.

02:20They increased prices by a lot.

02:22And actually, Richemont was very reasonable.

02:25And so, they still have that margin of maneuver.

02:27And that's what we saw in the results in the Americas, up 20%, which is pretty staggering.