PARIS, FRANCE – NOVEMBER 30: General view of the illuminated Cartier store on the Champs Elysées … (+)
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Richemont, known for Cartier and Van Cleef & Arpels, just reported impressive third-quarter results ending Dec. 31, with the luxury jewelry brand’s revenue up 14%.
In contrast, Signet Jewelers, the nation’s largest jewelry retailer and the world’s largest retailer of diamond jewelry, has seen a downturn in the U.S. accessible jewelry market during the promotional retail season. It reported a 2% drop in holiday same-store sales.
Richemont’s Roar
Overall, luxury conglomerate Richemont reported a 10% increase in sales to $6.3 billion (6.15 billion euros), but an 8% decline in watch sales, which totaled just $800 million. This is due to the fact that sales remained at $93 million (€867 million). Jewelry stood out, with sales reaching $4.6 billion (€4.5 billion).
While demand was weak in the Asia-Pacific market, other regions enjoyed double-digit growth, including a 22% increase in the Americas. This suggests that Richemont has achieved impressive growth in the US luxury jewelry market as the jewelry brand accounts for more than 70% of its total revenue.
According to the Wall Street Journal, Richemont’s strong third-year report, which beat analysts’ expectations, sent Richemont shares up 17%, its largest single-day gain on record.
It has also boosted the shares of European rivals LVMH and Kering, suggesting a return of affluent luxury consumers whose personal luxury spending has receded by 2% in 2024, Bain said. It is said that there is
Signet Whippers
Richemont’s results were in marked contrast to Signet’s results. The company announced Tuesday that holiday same-store sales were down 2% across its portfolio of mass-market jewelry brands, including Kay Jewelers, Zales, Jared, Diamond Direct, Blue Nile and James Allen. ‘s stock price has fallen nearly 20% this week.
Due to Signet’s weak holiday season results, the company gradually revised its fourth-quarter earnings forecast from $2.38 billion to $2.46 billion to $2.32 billion to $2.335 billion in late January and early February. I pulled it down.
Same-store sales through the first three quarters of fiscal 2025 will be down 4.6% to $4.4 billion, compared to a 12.6% decline in same-store sales of $4.7 billion in the prior year.
The lack of sales during the holiday season is due in part to consumers’ shift to lower price points for fashion jewelry and strong consumer response to promotional items, newly appointed CEO JK Symancyk said in a statement. He said:
“While there were positive aspects to our fundamental performance during the holiday period, we believe there are opportunities to reshape our customer care strategy in the areas of marketing, product design and assortment innovation,” he said. said.
very promotional holiday
Signet was unable to compete in the retail market, which saw increased promotional activity during the holiday season. Target, for example, reported a nearly 3% increase in total sales in November and December. This is welcome news after a year of poor results.
The National Retail Federation (NRF) reported a 4% increase in holiday sales overall, excluding auto, gasoline and food service retailers. NRF said American consumers are “still relatively healthy,” not really healthy, and that they are still “budget conscious.”
Interestingly, at the recent ICR conference, Symancyk revealed that Signet’s sales were lower than expected in the last 10 days of the holiday calendar. “This 10-day prime gifting period represents a sharp change from the normal volume flow in our business,” he shared.
This suggests that potential jewelry gift givers have exhausted their spending runway and turned to other options as the holiday season approaches. Moody’s Ratings analyst Micky Chadha echoed the same sentiment, saying consumers are moving away from purchasing “high-value, non-discretionary items” — jewelry — in favor of “value and necessities.” He pointed out that he was doing so.
GlobalData’s Neil Saunders told NBC that retailers offered more generous discounts this year compared to last to attract customers. He further warned that the real retail situation lies beneath the headlines.
“Not all retailers have had a successful holiday season,” he warned. “If retailers start reporting, you’ll see a polarization of revenue.”
It’s too early to bring back fine jewelry
Signet said that while the wealthy were more willing to indulge in high-end purchases from Richemont’s true luxury products, consumers could not be persuaded to part with their cash for more accessible jewellery. It was one of disappointment.
However, it may be too early to announce that the luxury jewelry market has overcome the headwinds.
LVMH reported that for the first nine months of its 2024 financial year, its Watches & Jewelry Group’s sales were down 5% to $8.2 billion (8 billion euros), or 3% organically.
Although the report does not separate watches and jewelry, it is safe to assume that, like Richemont, it is a market share leader in jewelry as well, along with its main brands Tiffany and Bulgari. Tiffany & Co., in particular, has increased consumer exposure for affordable luxury goods with its sterling silver jewelry collection.
We’ll have to wait and see if Tiffany’s New York City-centered holiday campaign, “With Love, Because 1837,” changes the dynamic. The campaign features actress and brand ambassador Anya Taylor-Joy, best known for The Queen’s Gambit and Furiosa, photographed walking around New York’s famous landmarks wearing Tiffany jewelry.
Our best guess is that Tiffany won’t unlock accessible luxury spending for backward consumers, but that the true luxury consumer will have Cartier, Van Cleef & Arpels, and another Richemont. He will continue to indulge in top brands such as the brand Buccellati.
