Clockwork profits at Cartier firm

Expensive pens are not just the preserve of royalty

China's growing taste for luxury goods has boosted profits at the firm which owns Cartier, Alfred Dunhill and Chloe.

Swiss firm Richemont, which produces luxury watches, jewellery, leather goods and fountain pens, saw first-half profits rise 22% to 645m euros (£437m).

Sales grew 64% in China as rapidly growing income levels boosted demand for expensive items.

But Richemont warned that future growth of watch sales could be hindered by too few watchmakers entering the industry.

Luxury appetite

The firm said it was working with similar businesses to develop training programmes for aspirant watchmakers.

But it added: "Growth in demand may lead to future capacity constraints in the industry, which could limit growth in certain product areas over the next few years."

The October figures are reasonably encouraging in the run-up to the important pre-Christmas trading season Johann Rupert, Richemont chairman

The robust state of the global economy, in particular Asia's strong performance, has increased the appetite for Richemont's products.

Sales of luxury watches rose 14%, while jewellery sales increased 13%. Demand for Montblanc fountain pens was also healthy, sales up 24%.

Losses at Alfred Dunhill were halved after sales rose 11%, while fashion label Chloe doubled its sales.

Richemont also made a £185m profit on its 20% investment in British American Tobacco, up 6% on the same period last year.

Richemont said its rate of sales growth had eased a little in October, but it was still confident about prospects for the rest of the year.

"The October figures are reasonably encouraging in the run-up to the important pre-Christmas trading season," said chairman Johann Rupert.