Is the luxury industry really in a downturn? At first glance, recent results from LVMH and Kering suggest a more cautious market environment. Growth has slowed, and some flagship fashion brands are facing pressure. Yet the latest performance of Richemont tells a different story.

Led by its powerful jewellery maisons, including Cartier and Van Cleef & Arpels, Richemont has shown that the luxury market is not simply weakening. Rather, the industry appears to be entering a phase of selective growth, where category exposure matters as much as brand ownership.

This article examines the latest Richemont, LVMH, and Kering results from the perspective of luxury brand strategy, M&A, investment logic, and financial value creation. The central theme is clear: the centre of gravity in luxury is shifting from soft luxury, such as fashion and leather goods, toward hard luxury, particularly jewellery and watches.

---

Chapter 1: Richemont, LVMH and Kering Results Reveal a Structural Shift in Luxury

The luxury market is not collapsing. It is becoming more selective.

The recent performance gap between Richemont, LVMH, and Kering should not be interpreted simply as a question of winners and losers. The more important issue is portfolio composition.

LVMH remains the world’s most diversified luxury group, with leading positions across fashion, leather goods, wines and spirits, watches, jewellery, perfumes, cosmetics, and selective retailing. Kering, by contrast, continues to be heavily influenced by the performance and repositioning of Gucci. Richemont stands apart because of its exceptional exposure to jewellery, especially through Cartier and Van Cleef & Arpels.

This distinction matters. Fashion and leather goods are highly profitable categories, but they are also more exposed to creative cycles, trend shifts, and brand heat. Jewellery, on the other hand, carries a different consumption logic. It is often linked to milestones, heritage, long-term ownership, and even asset preservation.

In other words, the luxury industry is not facing a uniform downturn. It is experiencing category selection. Consumers are becoming more discerning, and capital markets are increasingly rewarding luxury groups with exposure to resilient, high-margin, brand-driven categories.

---

Chapter 2: Why Cartier and Van Cleef & Arpels Are So Powerful

Jewellery converts brand equity into pricing power

Richemont’s strength is not simply that it owns luxury jewellery brands. Its real advantage lies in the quality of those brands. Cartier and Van Cleef & Arpels combine history, design codes, craftsmanship, scarcity, and global client recognition.

In luxury, brand equity is not created overnight. It is built through decades of disciplined pricing, controlled distribution, consistent storytelling, and carefully managed customer experience. Cartier and Van Cleef & Arpels are among the clearest examples of this long-term luxury brand management model.

Jewellery also benefits from a powerful emotional and financial logic. Engagement, anniversaries, inheritance, family gifts, and personal milestones all create demand that is less dependent on seasonal fashion cycles. This gives high jewellery brands a degree of resilience that many fashion-led brands may struggle to replicate.

For Richemont, this creates a highly attractive business structure. The group is not merely selling products. It is monetising intangible assets: brand heritage, design identity, client trust, and cultural permanence.

---

Chapter 3: What the Shift to Hard Luxury Means for LVMH and Kering

The LVMH model and the Kering challenge

The shift toward hard luxury does not undermine LVMH. In fact, LVMH already owns several major jewellery and watch maisons, including Tiffany & Co., Bvlgari, Chaumet, and TAG Heuer. The LVMH model is built on portfolio diversification, disciplined brand stewardship, and the ability to scale maisons globally without diluting their desirability.

However, the recent comparison with Richemont highlights an important point: diversification is most powerful when the portfolio contains categories with durable demand and high pricing power. Jewellery offers exactly that.

For Kering, the issue is more complex. The group has historically been associated with fashion-led luxury, especially Gucci. When Gucci slows, the impact on group perception is significant. Yet Kering also has meaningful jewellery assets, including Boucheron and Pomellato. If these maisons continue to grow, they could become an important pillar in Kering’s long-term repositioning.

The lesson is that luxury groups are increasingly judged not only by the fame of their brands, but by the quality of their category exposure. A portfolio concentrated in cyclical fashion carries a different valuation profile from one anchored in jewellery, watches, and other forms of hard luxury.

---

Chapter 4: Investment and Financial Perspective — Why Jewellery Enhances Enterprise Value

Brand value, margin resilience and intangible assets

From an accounting and finance perspective, jewellery is one of the most interesting segments in luxury. The value of a jewellery maison is not fully visible on the balance sheet. The most important assets are often intangible: brand equity, design archives, craftsmanship, customer loyalty, and pricing power.

This is precisely why luxury M&A requires a different valuation lens. Traditional financial metrics such as revenue multiples, EBITDA margins, and cash flow projections are necessary, but they are not sufficient. Investors must also assess whether the brand can sustain desirability, expand internationally, preserve scarcity, and command price increases over time.

Jewellery brands with strong heritage can generate attractive long-term cash flows because they combine high average selling prices with emotional demand and global scalability. Unlike many consumer goods businesses, the strongest luxury brands are not forced to compete primarily on volume or discounting.

This is one reason why strategic buyers and private equity investors continue to show interest in luxury and premium consumer brands. When managed properly, a luxury brand is not merely a commercial asset. It is a financial asset capable of converting intangible value into recurring economic returns.

---

Conclusion: The Rise of Hard Luxury

The latest comparison between Richemont, LVMH, and Kering suggests that the luxury industry is not simply entering a downturn. It is entering a more selective phase. Soft luxury remains important, but jewellery and watches are becoming increasingly central to the industry’s growth narrative.

Richemont’s strength reflects the power of hard luxury. Cartier and Van Cleef & Arpels are not just famous names. They are highly valuable intangible assets with the ability to generate pricing power, customer loyalty, and resilient cash flows.

For investors, executives, and advisors, the key question is no longer simply which luxury group owns the most famous brands. The more important question is which group owns the most durable categories, the strongest pricing power, and the most defensible brand equity.

In that sense, Richemont’s recent performance is not merely a company-specific success story. It is a signal of a broader structural shift in the global luxury industry: the rise of hard luxury.

---

A CPA’s Perspective

From a financial perspective, the enterprise value of a luxury company is often driven less by tangible assets and more by intangible assets such as brand equity, client relationships, pricing power, and intellectual property. Jewellery maisons are particularly powerful because they can convert these intangible assets into high-margin revenue.

From an investment perspective, brands such as Cartier and Van Cleef & Arpels should be evaluated as long-duration cash-generating assets. Their value depends not only on current sales, but also on the sustainability of desirability, the strength of global demand, and the ability to maintain pricing discipline over time.

From a tax perspective, global luxury groups must carefully manage intellectual property, royalties, transfer pricing, and profit allocation across jurisdictions. As brand value increases, the location and monetisation of intangible assets become increasingly important issues in international taxation.

From a strategic perspective, Japanese companies should learn from the luxury sector’s approach to value creation. The objective is not merely to produce high-quality goods. The real challenge is to build a structure that allows a company to sell at premium prices consistently, protect brand equity, and translate intangible value into long-term financial performance.