Fears grow as sales stall at Richemont

Shares in the world’s second-biggest luxury goods company fell over 6 per cent in early trading after it posted a smaller-than-expected rise in fourth-quarter group sales.

Other luxury stocks, which have been rallying since the start of the year on hopes demand in China was recovering from a wobble in 2012, were also dragged lower, including world number one LVMH and rival watchmaker Swatch.

“At this stage, it is unclear how business patterns may develop and how the business in the Asia Pacific region will evolve in the near future,” Richemont said.

The Swiss firm’s caution contrasts with more upbeat news recently from luxury brand Burberry, which pointed to a rebound in Chinese demand.

Chinese shoppers accounted for a quarter of luxury purchases globally and surpassed US consumers to become the world’s biggest buyers of luxury goods last year, according to consultancy Bain & Co.

Earlier this month, Swatch forecast strong growth for the Chinese New Year and perhaps even for the year as a whole in China, while US jeweller Tiffany & Co said China was its only bright spot.

Some analysts said that while investors were likely to be spooked by Richemont’s lower-than-expected sales, the maker of Montblanc pens was perhaps being overly prudent.