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
Climate change
Switzerland turns train tracks into solar power plants
In Switzerland more people are being referred to electrical therapies or psychedelic-assisted psychotherapy. Are there similar approaches where you live?
Living longer: What do you think about the longevity trend?
The longevity market is booming thanks in part to advances in the science of ageing. What do you think of the idea of significantly extending human lifespan?
SWISS cancels flight to Tel Aviv following missile attack near Ben Gurion airport
This content was published on
After a missile landed near Tel Aviv’s Ben-Gurion Airport, Swiss International Airlines (SWISS) cancelled its flight from Zurich to Tel Aviv on Sunday.
Swiss foreign minister rejects mandatory referendum for EU deals
This content was published on
Swiss Foreign Minister Ignazio Cassis defended the government’s decision to make EU deals subject to an optional rather than a mandatory referendum.
Pro-choice and anti-abortion activists face off in Geneva
This content was published on
Anti-abortion Christian groups held a silent prayer in front of the Geneva train station on Saturday, to the whistles and shouts of pro-choice demonstrators.
Swiss army soldier seriously injured in accident on Simplon Pass
This content was published on
A member of the Swiss army was seriously injured on Friday while manoeuvring a self-propelled howitzer on the Simplon Pass.
Basel attempts world‘s largest over-60s disco before Eurovision Song Contest
This content was published on
It was billed as a world record attempt for the biggest over-60s disco of all time. But most visitors came to Basel to have fun.
Basel prepares 700 volunteers for the Eurovision Song Contest
This content was published on
Around 320 people took part in one of the two official information events for the Eurovision Song Contest (ESC) in Basel on Friday.
More Swiss soldiers involved in accidents during training in Austria
This content was published on
The Swiss army has reported various accidents involving Swiss soldiers during the exercise “TRIAS 25” in Austria. Some have led to hospitalisations.
Swiss court rules vegan meat substitutes can’t use animal names
This content was published on
Vegan meat substitutes may not bear animal names such as “planted.chicken” according to a ruling by the Swiss Federal Supreme Court.
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.