In a trading update for the quarter, JSE heavyweight Richemont noted the “strong impact from Covid-19”.

It said there were “double-digit sales decline across all regions, distribution channels and business areas due to widespread temporary store and distribution centre closures, a halt in tourism and subdued consumer sentiment in many markets”.

The one glaring exception was a 49% surge in China, where online sales were brisk. It remains to be seen if this suggests a recovery in the world’s second-largest economy.

The maker of Cartier jewellery and IWC watches said the “performance reflected unprecedented levels of disruption and widespread temporary closures”. 

“The pandemic affected regions to varying degrees, depending on the duration of closures, reliance on tourist spending and the ‘feel-good factor’ of their domestic clientele. In Europe, sales were 59% lower than in the prior-year period, with all markets impacted by public health protection measures, as well as subdued local demand and a lack of international tourism when stores gradually reopened during the quarter,” it said.

In the Americas, sales contracted 61%, in the Middle East and Africa 38%.

The closures of stores and the collapse of international travel clearly and unsurprisingly have shaken the retail sector to its core on a global level. But given Richemont’s high-end customer base, it will be interesting to see the extent of recovery in its sales as lockdown measures ease. It’s not just in South Africa where the pandemic has had its harshest impact on the poor and lower-income households.

Richemont’s future trading updates and results should give a picture of how the wealthier classes are faring, with implications for the wider economy. DM/BM