Richemont's Jewelry Dominance: A Strategic Bet on Resilient Luxury Growth

The global luxury market is undergoing a seismic shift. While wristwatch sales at Swiss giants like Richemont stumble, jewelry is surging as a "hard" luxury asset—resilient to economic volatility, cultural trends, and geographic headwinds. Richemont’s fiscal 2024 results (ended March 2024) reveal a stark divergence: its jewelry division grew 11% (12% at constant rates) while watches slumped 11% in key regions. This bifurcation isn’t just cyclical—it signals a structural reallocation of wealth toward jewelry as a store of value and a safer bet for investors seeking to hedge against macroeconomic uncertainty.

The Structural Shift to Hard Luxury

Jewelry’s rise reflects a global preference for tangible, enduring assets over "soft" discretionary purchases like watches. Richemont’s jewelry brands—Cartier, Van Cleef & Arpels, and Buccellati—now account for 69% of group sales, up from 63% in 2019, and operate with a 33.1% operating margin, far outpacing watches’ 15.2%. This isn’t just about aesthetics; it’s a function of jewelry’s dual role as both a luxury good and an investment. In China, where property-driven wealth is slowing, affluent buyers are increasingly treating jewelry as an alternative to real estate—a trend Richemont’s Asia Pacific jewelry sales (+4% actual, +10% constant) demonstrate. Meanwhile, watches face a perfect storm: China’s post-pandemic spending shift away from wristwatches, the rise of "tech-luxe" alternatives, and a fragmented market for high-end mechanical timepieces.

Geographic Diversification as a Hedge

Richemont’s jewelry division has mastered the art of balancing exposure to volatile markets like China with growth in more stable regions. While watches suffered a 3% global sales decline (3% actual, 2% constant) due to Asia Pacific weakness, jewelry’s regional spread insulated it:
- Americas: U.S. sales became Richemont’s largest market, with jewelry driving a 1% overall regional growth (but likely higher in jewelry alone).
- Japan: Both jewelry and watches surged 8% on tourist demand, but jewelry’s higher margins made it the profit driver.
- Europe/Middle East: Steady, double-digit jewelry growth in markets like the UAE and Italy offset European watch declines.

This geographic diversification contrasts sharply with watchmakers reliant on Asia. shows jewelry’s decoupling from China’s property-linked wealth. Even in China, jewelry sales (up 7% in key cities) outperformed watches, which saw double-digit declines in 2023.

Why Now is the Time to Bet on Richemont

The macro backdrop favors firms like Richemont that are jewelry-heavy and less dependent on cyclical markets. Three factors make this a compelling investment thesis:
1. Margin Resilience: Jewelry’s 33% margins act as a buffer against inflation and currency headwinds. Even as the Swiss franc strengthened, jewelry’s constant-rate growth (+12%) shielded profits better than watches.
2. Strategic Acquisitions: Richemont’s 2024 acquisition of Vhernier—a high-margin Italian jewelry brand—and its 70% stake in Gianvito Rossi (luxury footwear) signal a long-term bet on jewelry’s growth potential.
3. Consumer Shifts: Global wealth is becoming less tied to real estate and more concentrated in liquid assets like jewelry. In emerging markets, jewelry is a culturally ingrained wealth store; in the U.S., it’s a status symbol for Gen Z and millennials.

The Bottom Line: A Safe Haven in a Volatile World

Richemont isn’t just a luxury goods company—it’s a play on the global shift toward "hard luxury" assets. With jewelry’s margin resilience, geographic diversification, and its status as a wealth-preserving asset, it’s uniquely positioned to outperform peers during macro downturns. Investors seeking insulation from China’s cyclical slowdown or European inflation should prioritize companies like Richemont. The data is clear: jewelry’s 11% surge isn’t a blip—it’s the new normal. Now is the time to stake your claim.