Rocketing China economy adds to luxury market sales upturn
China (Bloomberg) <\m> Cie. Financiere Richemont AG, the world’s second-largest luxury-goods maker, may say today fiscal third-quarter sales rose as bankers spent record bonuses and demand increased in China.Revenue climbed 11 percent in the three months ended Dec. 31, according to the median estimate of five analysts surveyed by Bloomberg. The Geneva-based company will give sales growth in percentage terms, rather than its reporting currency of euros.
The five biggest U.S. securities firms handed out about $36 billion of bonuses last year, triggering December splurges on Richemont goods including Cartier diamond jewellery, Mont Blanc watches and pens, and Dunhill leather goods. The company also is looking to rising wealth in China, whose economy is the world’s fastest-growing, to drive sales.
Richemont took back direct control of 63 franchised Dunhill boutiques in China last year to eliminate grey-market pricing and boost profitability at individual stores. Fiscal first-half sales climbed 16 percent to 2.3 billion euros ($3 billion), helped by a 64 percent surge in Chinese revenue, the luxury-goods maker said in November.
The company’s shares jumped 26 percent last year, beating the 5.2 percent advance by LVMH Moet Hennessy Louis Vuitton SA, the world’s biggest luxury-goods maker, though lagging the 37 percent gain by Swatch Group, the world’s largest watchmaker.
Swatch Group said yesterday sales rose 12 percent in 2006 on purchases of premium Breguet, Blancpain and Omega timepieces and operating profit will show an “above-average” increase.
Richemont, the maker of Purdey firearms, is scheduled to release third-quarter sales figures this morning.
