Despite a broader slowdown in the luxury market, the wealthiest consumers continue to purchase high-end jewelry, benefiting Swiss luxury group Richemont. Brands like Van Cleef & Arpels, Buccellati, and Cartier are highly desirable, positioning Richemont as a leader in the luxury jewelry market. Luca Solca from Bernstein noted Richemont's jewelry brands are at the top of consumer desirability, surpassing efforts by LVMH to challenge this leadership.

Richemont's fiscal fourth-quarter sales exceeded expectations, driven by an 11% growth in its Jewellery Maisons division. Jewelry was the strongest segment for the full year, growing by 8%. This contrasts with other major luxury brands like LVMH, Kering, and Burberry, which reported a slowdown in sales for the quarter ending in March.

Specifically, LVMH's watch and jewelry division experienced flat year-on-year sales in the first quarter, with a 2% organic decline in 2024 due to weaker demand for brands like Tiffany & Co, Bvlgari, TAG Heuer, and Hublot. Richemont's chairman, Johann Rupert, stated the company is gaining market share in jewelry from both branded and non-branded companies.

However, Richemont's Specialist Watchmakers division, including Piaget and Roger Dubuis, faced challenges. Watch sales fell by 13% in 2024, primarily due to weakness in China. Although the decline eased slightly in the second half of the year with recovering strength in the Americas, the global watch market experienced a slowdown affecting volumes.

Bernstein's Solca suggested that the luxury watch market's nature, where products are considered long-term purchases, makes it slow to rebound. He anticipates watches will remain on the backfoot for some time, while jewelry benefits from more frequent purchases and a relative price advantage compared to other luxury items.

Richemont's focus on high-end jewelry may provide an advantage amid resurging global trade headwinds. Rupert mentioned the company would avoid unsustainable price increases, differing from other luxury and jewelry players. AJ Bell's Russ Mould noted the business's increasing reliance on its jewelry arm and hopes for sustained brand strength in this area.

Analysts caution that Richemont may face challenges, including the strength of the Swiss franc against the dollar, higher gold prices, and the impact of tariffs. These headwinds could potentially threaten the company's market dominance.