Richemont Group Head says watchmakers should cut production – CPP-LUXURY

Head of Richemont, the owner of Cartier and Vacheron Constantin, said the luxury watch industry must reduce production after a downturn in demand for costly timepieces. Chairman and founder Johann Rupert told shareholders at the Swiss luxury conglomerate’s annual general meeting that global demand for watches “has gone past the boom,” held back by subdued sales in mainland China and Hong Kong.

“One should be cautious in just trying to pursue volume,” the South African billionaire said in Geneva on Wednesday. The Richemont chairman, whose brands also include IWC, Jaeger-LeCoultre and Van Cleef & Arpels, applauded private competitors in the watch industry for showing restraint. The biggest closely held watchmakers in Switzerland include Rolex, Patek Philippe and Audemars Piguet.

“We have a close relationship with the private competitors and we know what they are doing and they are acting very responsibly by constraining production,” he said. Although Rupert controls Richemont through a family trust that has a majority of the voting shares, the stock is publicly traded and the company is required to provide detailed financial updates. By contrast, closely held watchmakers in Switzerland “don’t have shareholders to report to,” he added.

After three years of gains at record value levels, Swiss watch exports have declined this year. Consumers turned cautious as pandemic-era savings ran dry following a period of high inflation and as a strong Swiss franc raised watch prices and crimped profits for producers.

According to the Federation of the Swiss Watch Industry, in the first six months of 2024 the decline in exports was 3.3%, compared to the same period in 2023, to 12.9 billion francs (approximately 13.3 billion of euros). Producers are especially worried about -21.6% in China and -19.9% in Hong Kong. In 2023 the sector had exceeded the figure of 26 billion francs in turnover for the first time, an increase of 7.6% compared to 2022. The Swiss federation is warning of difficulties in 2025.

Vacheron Constantin watches novelties 2024