Watch sales for Richemont dropped by 2% in the three months to June 30 as street protests in Hong Kong, the largest market in the world for Swiss watches, kept customers away.
Swatch Group also said that the ongoing disruption in Hong Kong was a factor as it announced a 3.7% decline in sales for the first six months of 2019.
According to the Federation of the Swiss Watch Industry, exports to Hong Kong slumped by 28% in June while exports to America rose by 8%, making us the largest market in the world right now.
Quarterly sales for the whole of Richemont, including its engine room jewellery and watch brand Cartier, rose by 9% at constant exchange rates (12% adjusted for currency variations). The figure is flattered by including a full three months’ figures for Yoox Net-A-Porter and Watchfinder compared to two months for YNAP and one month for Watchfinder in the corresponding quarter last year.
Richemont has enjoyed a surge in its share price this year, trading at CHF 85 today, up 40% since December.
The group is continuing to work on improving its wholesale operations by closing under-performing accounts. This led to a 2% drop in wholesale watch revenue but is expected to have a positive effect over the longer term as it squeezes grey market sales.
Richemont says that watch sales in its most recent quarter were affected by the timing of new models being released this year from the likes of IWC, Vacheron Constantin and Panerai.