UPDATE 3-Japanese sales help Richemont through China weakness

Thu Sep 12, 2013 11:02am EDT

* 9 pct sales growth, just shy of forecasts

* Sales in Japan rise 17 pct, Asia-Pacific up 4 pct

* Says Europe and Middle East helped by tourists

* Shares down 2.5 pct (Adds chairman comments, rewrites throughout)

By Silke Koltrowitz

GENEVA, Sept 12 (Reuters) - Sales at luxury goods group Richemont rose 9 percent in the five months through August, just shy of forecasts, with weak demand for its watches in mainland China but strong growth in Japan and the Americas.

Richemont, maker of Cartier jewellery and Piaget watches, said its sales growth in the Asia-Pacific region, where it made 41 percent of sales in the full year to March, one of the highest exposures in the luxury goods industry, slowed to 4 percent from 12 percent a year ago.

"Asia-Pacific was led by good growth in Hong Kong and Macau, offset by lower sales in mainland China," it said on Thursday.

Luxury goods groups have been grappling with weak demand in their most important growth market, China, but most recently there have been signs that demand may be recovering.

Tiffany, Prada and Coach have reported good sales growth in China, while Kering still noted weak Chinese demand, and Hermes said its timepieces in China were suffering from a government crackdown on expensive gifts for favours.

Sales in the company's fourth-largest market, Japan, which accounts for 9 percent of sales - on a par with mainland China - jumped 17 percent, helped by the country's vast economic stimulus programme under Prime Minister Shinzo Abe.

"Everybody is doing well in Japan; we're doing well, and all of our competitors are doing well ... That stimulation is working there," outgoing Chairman Johann Rupert told journalists on the sidelines of the annual shareholder meeting in Geneva. Rupert announced earlier this year he would take a year's sabbatical from September.

The Nikkei stock average, watched as a proxy for luxury consumer confidence, is up 38 percent since the start of the year, and Japanese department store sales rose just over 2 percent in the first half.

Sales in the Americas, principally the United States, also rose 17 percent, with strong momentum in jewellery and a small boost from the consolidation of U.S. fashion brand Peter Millar, which it bought last year.

FLAT MONTBLANC

Sales at Richemont's jewellery brands or maisons grew 8 percent, while sales at its specialist watchmakers, which include Vacheron Constantin and IWC, were up 13 percent.

"Jewellery maisons was below (expectations) despite strong jewellery sales," analyst Rene Weber at bank Vontobel said.

Cartier is by far Richemont's biggest jewellery brand, but it also makes watches, which are included in the jewellery business unit and have recently been quite weak.

Industry-wide figures showed exports of Swiss watches to China fell 17.5 percent from January to July. They were also down 9.6 percent to Hong Kong, the biggest market for Swiss watches, but the slowdown was less marked in July than in the first half of the year.

The group's Montblanc brand managed only flat sales, as the No.1 luxury pen marque battles to diversify into watches and jewellery to help make up for weak pen sales.

Shares in Richemont, which have risen 31 percent so far this year, were down 2.5 percent in afternoon trade at 91.15 euros. The shares trade at 17.4 times forward earnings, a premium to Swatch Group, on 16, but a small discount to LVMH, on 17.6, according to Thomson Reuters data.

Richemont group sales in Europe and the Middle East were up 10 percent, down from 19 percent a year ago, with tourist shoppers mitigating the slowing growth.

"The Chinese are not buying as much in China but they buy when they are travelling," Rupert said.

Asked by shareholders whether he'd be back after his sabbatical, he joked: "My late father always said, 'Never take a holiday of more than two weeks. You may like it.'"

He added: "If there's anything funny, you'll see me back in no time; I have too big an investment in the company." (Additional reporting by Kevin Krolicki in Tokyo, Astrid Wendlandt in Paris and Alice Baghdjian in Zurich; Editing by Will Waterman)

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