South Africa’s richest man Johann Rupert, who controls Richemont, the Swiss owner of luxury brands such as Cartier, IWC and Vacheron Constantin, has expressed concern that inflation is beginning to impact the demand for luxury goods in Europe.
Rupert noted that the persistent rise in prices is causing even affluent European consumers to curtail their purchasing habits.
“We’ve seen the squeeze,” the South African billionaire stated during Richemont’s annual meeting in Geneva on Wednesday.
Rupert explained to shareholders that European households are now allocating a larger portion of their income toward essential expenses compared to the past decade. In July, Richemont had issued a warning regarding diminishing demand in the United States and China, both major markets for luxury items. However, Rupert mentioned a positive development for European markets, as Chinese shoppers have resumed their travels.
Luxury sales thrived during and post-pandemic, as consumers, buoyed by low interest rates and accumulated savings, indulged in high-end watches, handbags, and jewelry.
In response to central banks swiftly increasing borrowing costs to combat rising prices, Rupert expressed anticipation that disruptions will persist.
Rupert is the richest man in South Africa with a fortune estimated at $11.3 billion, according to the Bloomberg Billionaires Index.