Cartier gems likely made it into a record number of Christmas stockings last month. Bulgari and Tiffany & Co. should also benefit from sparkling demand for expensive jewelry.
Richemont, the Swiss luxury goods company that owns Cartier and Piaget, said Wednesday that group sales for the three months through December increased almost a third compared with the same quarter of 2020. Its shares gained 8% in early trading. Most of Europe’s big luxury names have sold off this year as investors dumped growth stocks. Richemont’s results are the first sign that demand for the expensive goods the sector sells is holding up.
All of the company’s divisions did well, including troubled online retailer Yoox-net-a-Porter, which many investors would like to see sold off. But the 38% year-over-year growth seen at Richemont’s jewelry brands was most eye-catching. Although consumers splurged on gems in all regions, U.S. shoppers—who typically buy half of the world’s diamond jewelry by value, according to De Beers—were especially extravagant. Richemont’s sales in the Americas were up 59% compared with the same quarter of 2019.
In a positive sign, the growth appears to have come from selling more items rather than raising sticker prices. Richemont does pass on higher labor and raw-material costs, but hasn’t pushed increases as hard as some luxury brands. A classic flap bag made by privately-owned Chanel is now 70% more expensive than before the pandemic in some markets, based on Jefferies analysis.
Expensive jewelry brands tend to do well when stock markets and household wealth are high, as has been the case throughout most of the pandemic. Consumers have also had fewer spending options: Money that would normally be spent on luxury travel has likely been mopped up by watches, necklaces and the like.
Overall, U.S. jewelry sales increased 32% year-over-year from Nov. 1 to Dec. 24, according to Mastercard SpendingPulse. The RapNet Diamond Index for one-carat diamonds rose 17.4% in 2021 as consumer demand picked up. And in the latest bullish sign, De Beers upped prices of uncut diamonds by 8% at its first sale of 2022, Bloomberg reported.
All this bodes well for Bulgari and Tiffany & Co., rival jewelry brands owned by luxury goods giant LVMH Moët Hennessy Louis Vuitton, which reports festive sales later this month. The company’s fashion labels Louis Vuitton and Christian Dior have been its chief growth drivers during the pandemic. Cartier’s results suggest LVMH’s jewelry brands could be about to shine too.
Write to Carol Ryan at carol.ryan@wsj.com
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Appeared in the January 20, 2022, print edition as ‘Cartier’s Glow Bodes Well for Luxury Names.’
