Signs that even the world's richest consumers are falling prey to fears of recession gathered pace yesterday as two big luxury goods makers said demand from Japan and the US for Cartier watches, designer handbags and expensive jewellery was slowing.
Richemont, the world's second largest luxury goods company, said that underlying growth slowed to 10 per cent in December - against 14 per cent for the full quarter - as demand waned from consumers in two of the world's biggest economies.
The news sent shares in the maker of Cartier watches and Montblanc pens down 6.65 per cent to SFr58.25. The group narrowly missed forecasts with an 8 per cent rise in group sales to €1.67bn (£1.25bn).
Coach, the largest US maker of designer handbags, also said underlying sales in its US retail stores had fallen during the second quarter and were down 1.1 per cent as consumers cut back on visits to stores and when they did make a purchase were opting for lower-priced items.
The drop in same-store sales in 2007 compares with a 25.7 per cent increase in the holiday period in 2006. Coach said the drop in transaction sizes had been "unexpected".
"My own view is that we're already in a consumer recession," Lew Frankfort, chief executive of Coach, told Reuters. "We do need a tax stimulus package," he added, suggesting that this week's cut in US interest rates was not enough alone to boost spending.
Tiffany, the US-based jeweller, this month also lowered its quarterly earnings forecast after achieving disappointing holiday sales.
The Italian luxury goods sector has not yet reported signs of a slowdown, in spite of expectations that consumer confidence is on the wane. Aeffe, the holding company behind Moschino, Alberta Ferretti and other fashion brands, said this week there had been "no negative signs" in the US over the Christmas period or this month so far.
Financial Time / By Elizabeth Rigby and Norma Cohen in London and Adrian,Michaels in Milan / www.ft.com
