Africa’s second-richest man’s Richemont just posted record profits but China’s growing love for local luxury brands is a looming threat

Africa’s second-richest man, Johann Rupert’s luxury empire has delivered one of its strongest performances on record, but investors are increasingly focused on a question that could shape the future of the Swiss luxury giant: what happens if Chinese consumers stop choosing European luxury brands?

• Richemont, the luxury giant controlled by Africa’s richest man Johann Rupert, reported record sales of €22.4 billion ($24.2 billion) and a 27% jump in profit.
• The owner of Cartier and Van Cleef & Arpels has outperformed many luxury rivals despite weak Chinese demand.
• However, analysts warn that China remains the industry’s most important market as consumers increasingly embrace domestic luxury brands.
• The shift could become one of the biggest long-term challenges facing Rupert’s luxury empire.

Richemont, the owner of Cartier, Van Cleef & Arpels, Piaget, Montblanc and several other high-end brands, reported revenue of €22.4 billion ($24.2 billion) for the year ended March 2026, up 11% at constant exchange rates.

Net profit rose 27% to €3.5 billion ($3.8 billion), while operating profit climbed 23% to €4.5 billion ($4.9 billion), showing the resilience of a business that has weathered slowing global luxury demand better than many of its rivals.

The results surprised parts of the market, particularly as luxury groups continue to grapple with weaker consumer spending, geopolitical uncertainty, elevated gold prices and a prolonged slowdown in China.

Yet despite the record earnings, China remains the biggest variable hanging over Richemont’s future.

The China question

China has been one of the most important drivers of global luxury growth for more than a decade, accounting for roughly one-third of luxury spending worldwide at its peak.

That influence means every major luxury group, from Richemont and LVMH to Kering and Prada, continues to watch the Chinese market closely.

Speaking in an interview with BusinessDay TV, Jordan Toy, portfolio manager and director at Legacy Family Wealth, described Richemont’s latest performance as particularly strong but warned that future growth would still depend heavily on developments in China.

“Whether they can continue to compound, I think it’s largely similar to some of the other luxury players – it’s key what happens in China,” Toy said. “You need more demand coming out of there.”

His comments shows a growing concern across the luxury industry. The challenge is no longer simply that Chinese consumers are spending less, some are increasingly spending differently.

A new threat from within China

For decades, European luxury houses benefited from China’s rising middle class and wealthy consumers seeking prestige brands from Europe.

Now domestic luxury brands are beginning to challenge that dominance. One company drawing particular attention is Laopu Gold, a Chinese jewellery maker whose sales surged nearly 170% in a single year.

The company has built its reputation around handcrafted gold jewellery and products that contain significantly more gold than many competing luxury items.

In an environment where economic uncertainty and weakness in China’s property sector have made consumers more cautious, many buyers are increasingly looking for products that combine luxury appeal with perceived investment value.

That trend has helped fuel the rise of local brands at a time when some Western luxury groups are struggling to regain momentum.

Even executives at major luxury companies have acknowledged the shift.

LVMH deputy chief executive Stéphane Bianchi recently said that Chinese consumers are showing increasing interest in domestic brands, reflecting broader changes in consumer behaviour across the country.

Rupert has publicly acknowledged watching emerging Chinese competitors closely, although he maintains that Richemont’s flagship brands occupy a different position in the market.

Cartier remains Richemont’s crown jewel

Despite concerns about China, Richemont continues to enjoy a major advantage that many competitors cannot easily replicate.

Its jewellery division, led by Cartier and Van Cleef & Arpels, remains one of the strongest businesses in global luxury.

The group said jewellery maisons delivered another exceptional performance during the year, helping offset softer demand in other areas.

Toy told BusinessDay TV that Cartier and Van Cleef & Arpels continue to demonstrate the strength of Richemont’s portfolio.

“Those are pretty strong brands. You can’t start a jewellery business tomorrow and replicate that at all easily,” he said

The company’s focus on jewellery also differentiates it from some competitors that rely more heavily on fashion and leather goods, categories that have faced greater pressure in recent years.

Growth beyond China

Richemont’s latest results also showed that growth is becoming increasingly diversified. The Americas delivered double-digit sales growth, while the Middle East and Africa remained among the company’s fastest-growing regions.

That geographic diversification has helped cushion the impact of weaker Chinese demand. The company also enters the next phase of growth from a position of financial strength.

Richemont ended the financial year with €8.5 billion ($9.2 billion) in net cash, giving management considerable flexibility to invest in stores, digital capabilities, manufacturing capacity and potential acquisitions.

The group has also removed a long-standing earnings drag following the disposal of Yoox Net-a-Porter, the online luxury retailer that weighed on profitability for years.

While concerns about China remain, many investors continue to view Richemont as one of the strongest names in the luxury sector.

Toy said the company remains well positioned because of its brand quality, strong balance sheet and exposure to categories that continue to attract affluent consumers.

He also noted that the stock trades at attractive valuation levels relative to some peers.

Gary Booysen, director at Rand Swiss, argued that luxury ultimately derives its value from heritage and scarcity.

“It comes from brands. It comes from brands that are a hundred years old that you cannot replicate,” he said.