Richemont UK outperforms rivals in hard luxury with margin-rich growth
Bottom Line Impact
Richemont's outsized UK growth and 155% profit uplift in watches and jewelry signal a structurally improving revenue and margin trajectory, a stronger competitive stance against both conglomerate rivals and top independents, and a reinforcement of brand equity that can be leveraged to drive premium pricing and selective expansion in other mature markets.
Key Facts
5- Richemont UK watches and jewelry sales rose 5.3% to £277m in the 12 months to 1 March 2025, while LVMH Jewellery & Watches UK and Swatch Group UK both recorded sales declines in 2024.
- Operating profit for Richemont's UK watches and jewelry business increased 155% to £32m, implying material margin expansion and improved operational leverage versus prior years.
- Richemont's UK watch and jewelry revenues (excluding Cartier and Watchfinder & Co.) have grown 370% since 2014, compared with 46% for LVMH Jewellery & Watches and 216% for Swatch Group over the same period.
- Montblanc, which generated standalone UK sales of £26m in 2017, has since been integrated into Richemont's reported UK watches and jewelry results, contributing to scale and brand portfolio synergies.
- In the broader UK market, independent leaders Rolex, Patek Philippe and Audemars Piguet reported UK sales of £702m, £271m and £81m respectively in their latest financial years, underscoring the concentration of purchasing power in top-tier hard luxury brands.
Time Horizons
Key Roles Affected
Executive Summary
Richemont's UK watches and jewelry division delivered a 5.3% sales increase to £277m and a 155% surge in operating profit to £32m in FY 2024-25, decisively outperforming LVMH and Swatch Group, which posted declines. This signals superior pricing power, channel discipline, and brand momentum in a mature, competitive hard-luxury market, reinforcing Richemont's strategic strength in Europe and providing a playbook for other regions under pressure from macro and tourism headwinds.
Actionable Insights
Immediate Actions (Next 30-90 days)
Recalibrate regional investment priorities to treat the UK as a strategic growth and innovation hub for hard-luxury retail, reallocating capex from underperforming European markets into UK flagship enhancements, mono-brand expansion and experiential concepts.
Rationale: Richemont's 5.3% sales growth and 155% profit surge in a challenging UK backdrop signal that the market can still deliver high-margin growth when supported by disciplined pricing and focused brand strategies, providing a replicable model for other mature regions.
Role affected:CEO
Urgency level:immediate
Pivot UK marketing toward reinforcing brand heat and perceived scarcity in core collections, while amplifying cross-maison storytelling that positions the portfolio as the natural alternative or complement to Rolex, Patek Philippe and Audemars Piguet.
Rationale: With UK leaders generating £702m, £271m and £81m respectively, there is significant halo demand; Richemont's outperformance suggests that aspirational clients priced out of or waitlisted at top independents can be captured through targeted, status-driven communication and omni-channel journeys.
Role affected:CMO
Urgency level:immediate
Short-term Actions (6-12 months)
Tighten performance thresholds and profitability hurdles for UK doors and wholesale relationships, prioritizing brands and partners that deliver Richemont-like margin profiles and reallocating working capital away from low-velocity inventories.
Rationale: A 155% increase in operating profit off modest top-line growth demonstrates the financial payoff of mix optimization and cost discipline; similar measures can lift group margins by 50-150 bps if applied systematically across underperforming portfolios.
Role affected:CFO
Urgency level:short-term
Renegotiate UK retailer terms and floor-space allocations leveraging outperformance data, consolidating distribution into fewer, higher-quality partners while accelerating mono-brand boutiques where traffic and VIC density justify it.
Rationale: Demonstrated 370% growth since 2014 versus 46% for LVMH shifts negotiating leverage; optimizing door count and space can further enhance sell-out, reduce discount exposure and protect pricing power.
Role affected:Chief Retail / Chief Commercial Officer
Urgency level:short-term
Risks & Opportunities
Primary Risks
- Over-reliance on the UK as a profitability engine could backfire if macro conditions deteriorate further (e.g., consumer confidence drop, taxation changes on luxury goods, continued tourism weakness), compressing high-margin sales.
- Competitor response from LVMH and Swatch Group, such as aggressive promotions, accelerated novelties or intensified wholesale push, could trigger local price competition and margin pressure in key UK multi-brand doors.
- Execution risk in scaling Richemont's UK playbook to other regions, where consumer behavior, regulatory environments and retailer structures differ, could dilute returns if not adapted carefully.
Primary Opportunities
- Capture incremental share from LVMH and Swatch Group in the UK by selectively expanding SKUs, limited editions and clienteling programs in top-performing doors, capitalizing on their current sales decline.
- Leverage the UK as a reference market to fine-tune pricing corridors, assortment tiers and service models for affluent locals versus tourists, then roll out best practices to continental Europe and Middle East hotspots within 6-12 months.
- Strengthen partnerships with leading UK retailers and landlords by co-investing in experiential spaces and data-sharing initiatives, securing premium placements and long-term lease advantages ahead of competitors.