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Richemont chair Johann Rupert said the luxury group would avoid sudden, sharp prices that could spark a consumer backlash, as it contends with the impact of US tariffs.
Rupert said that being restrained on price rises in the past four years compared with some rivals had “benefited” the Swiss luxury group amid some customer backlash over the increases.
He also warned against creating the kinds of price differences that push clients to shop across borders, as happened last year when a weak yen resulted in Chinese tourists flocking to buy luxury products in Japan.
“We will not make sudden rapid price increases,” Rupert said on Friday, adding that the company would make adjustments to account for impacts such as currency volatility. “Obviously we need universal pricing otherwise people travel across borders . . . There is a bit of a backlash on some price increases among some competitors.”
Rivals including Hermes have already said they will push up prices in the US to offset the impact of tariffs there, while research from Citi has shown brands including LVMH’s Louis Vuitton have been increasing prices on some products in some regions in April. Richemont’s Van Cleef and Cartier have also increased on some products.
Many luxury brands have pushed through substantial price increases on their products since 2019, with the cost on some Chanel and Dior bags up by high double digits in that period, leading to criticism from clients as the heady days of the pandemic luxury boom fade. Both Richemont and Hermes, maker of Birkin bags, have been more restrained in their price rises over that period, according to analysts.
Business at Richemont’s jewellery houses continued to boom despite a tough economic environment as the Swiss luxury group reported full-year results on Friday, though its watchmaking business came under pressure.
Sales in its jewellery division, which includes Cartier and Van Cleef & Arpels, rose to €3.7bn in the three months to March 31, an 11 per cent increase on the same period a year ago excluding currency movements, beating consensus expectations.
However, sales in the watchmaking operation fell 11 per cent. Group sales increased 8 per cent to €5.2bn in the quarter, with revenues rising by more than 10 per cent in all regions except Asia Pacific, where they fell 7 per cent.
