Richemont Annual Revenue Rises, but Watch Division Falls 13%
FY2025 shows strong U.S. growth offset by sharp Asia-Pacific slowdown
This week, Richemont published its annual results for the fiscal year ended March 31, 2025. The data confirm a trend we’ve analyzed several times before: a resilient and even accelerating U.S. market contrasted by a significant slowdown in Asia, particularly China and Hong Kong, which is weighing heavily on the performance of major luxury houses.
Specialist Watchmakers Down: The Chinese Slowdown Hits Richemont
In the financial statements as of March 31, 2025, Richemont’s Specialist Watchmakers division, which includes brands like IWC, Panerai, Jaeger-LeCoultre, Piaget, Vacheron Constantin, and A. Lange & Söhne, posted a 13% drop in sales, with an even steeper 27% decline in the Asia-Pacific region, excluding Japan.
This is not just about a contraction in Chinese demand, but also the result of an unfavorable macroeconomic context: rising raw material costs (especially gold), a strengthening Swiss franc, and increasing uncertainty regarding demand, both excessive and insufficient, across different markets.
At the same time, mounting pressure on profitability led to the division’s operating margin falling to a meager 5.3%, compared to a much more robust 32% for the Jewellery division (Cartier, Van Cleef & Arpels, Buccellati, Vhernier).
Production Cuts as a Crisis Response
Faced with market instability and the clear risk of overstocking, Richemont has taken a cautious path.
Chairman Johann Rupert praised the “wise” behavior of several Swiss competitors (including Rolex, Patek Philippe, and Audemars Piguet) who voluntarily reduced production to avoid a domino effect of surplus: discounts, brand devaluation, and margin compression.
It is no coincidence that Richemont has initiated selective stock buy-backs in China, reduced working hours in Switzerland, and adopted a decentralized management policy, assigning the responsibility for performance, sales, and financials to the CEOs of each maison, without a centralized divisional head.
A key element in the industry’s overall resilience remains the American market, which recorded +15% growth for Richemont and saw an unexpected boom in April. However, the outlook is still full of uncertainties. A 10% tariff on Swiss imports, the appreciation of the Swiss franc, and the soaring gold price (over USD 3,300/oz) are concrete threats to the long-term sustainability of margins.
Final Thoughts
The snapshot that emerges from the 2025 financials is one of a sector in transition. On the one hand, high-end watchmaking shows remarkable adaptability, particularly in managing supply. On the other hand, the interdependence between markets, especially the U.S. and China, exposes major groups to increasingly difficult-to-manage systemic vulnerabilities.
