China rebound good for Richemont

Luxury goods sales have been very resilient over the last few years. The old adage is true - the rich do not feel inflation. We are lucky to have the second-biggest luxury goods group in the world listed on the JSE. The Richemont share price has tripled in the last three years. Some of that was a weaker Rand but most of it is from a strong underlying business.

The US consumer has been the stalwart of the luxury industry over the last few years while China made an absolute hash of mitigating Covid risks. Analysts at Goldman Sachs now believe that Chinese luxury goods consumers are coming back hot. Chinese clients also spend a lot when they travel so this is good news for Europe too.

Despite the solid share price performance, Richemont still trades at a discount to many of its peers. We are happy holders of this solid business in our local portfolios and will continue to add when fresh Rands are looking for a home.