Van Cleef Expects to Win China Sales on Slowing Economy
Van Cleef & Arpels, the jewelry house owned by Cie. Financiere Richemont SA (CFR), expects to win gem sales from Chinese consumers concerned with declining stock and property investments.
Jewelry demand will hold amid economic uncertainty, Van Cleef & Arpels Chief Executive Officer Stanislas de Quercize said in an interview with Bloomberg Television in Shanghai yesterday. The Paris-based house, whose gems have been worn by Julia Roberts and Scarlett Johanssen, has opened eight stores in mainland China since 2004.
Asia has become Richemont’s biggest market, overtaking Europe, with revenue from the region more than doubling to 51 percent of the company’s total since the year ended March 2009. Sales of luxury jewelry in mainland China grew about 25 percent last year, according to a report last December by Bain & Co.
“Jewelry with provenance from an expert, there’s no comparison,” de Quercize said. “It’s the top of the chart in terms of long-lasting value.”
Chinese import prices for jewelry and precious materials hit their highest level in at least five years last January, according to government data.
Price inflation in the European Union for jewelry, clocks and watches hit a 15-year high of 12 percent last March and is currently running at 10.5 percent, according to Eurostat.
Jewelry with recognized brands has the same scarcity value and long-term appeal as Picasso paintings, Quercize said.
“It’s reassuring to know that its holding value can increase,” he said.
Jewelry makes up about half of Geneva-based Richemont’s sales and 80 percent of operating income, with watch-making comprising the bulk of the rest.
While jewelry can be considered a store of value, auction prices can fall below those in retail stores and wholesale prices may fluctuate.
Prices for top-quality 1 carat diamonds are about 14 percent less than their level in July, according to an index compiled by the Rapaport Diamond Report.
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