ZURICH (Reuters) - Sales growth at luxury goods group Richemont (S:CFR) slowed as political unrest in Hong Kong weighed on turnover in the three months to Dec. 31, the Swiss group said on Friday.
Sales at constant currencies increased 4% in the third quarter of Richemont's fiscal year to 4.16 billion euros (3.54 billion pounds), the world's second-biggest luxury goods group said. They had risen 6% at constant currencies in the first half.
At actual exchange rates, sales rose 6% in the quarter.
Richemont said sales grew in all regions except Japan. Sales in Europe advanced 9%, benefiting from favourable comparative numbers and strong sales in most markets.
Sales in Asia Pacific increased 2%, driven by double-digit sales growth in China and Korea, which more than offset a "severe sales contraction in Hong Kong".
Sales in the Americas rose 5% and by 3% in the Middle East and Africa, while sales in Japan fell 7%, hit by lower tourist spending given a strong yen and an October 2019 value added tax increase that benefited first-half sales.
Swiss watchmakers are facing a severe decline in their No. 1 market Hong Kong, shaken by pro-democracy protests, while geopolitical tensions in other parts of the world and a profound reshaping of the watch retail network have also hit sales.
Richemont, with its high-end IWC and Jaeger-LeCoultre timepieces, is less exposed than peer Swatch Group (S:UHR) to competition from smartwatches, and has up to now been able to offset sluggish luxury watch sales thanks to its strong presence in the fast-growing jewellery category.
But the integration of online distributors Yoox Net-a-Porter (MI:YNAP) and Watchfinder bought to boost digital sales takes time and costs money, and rival LVMH's (PA:LVMH) $16.2 billion takeover of U.S. jeweller Tiffany (N:TIF) is seen as a potential threat to Richemont's flagship brand Cartier.