Richemont Sells Itself as a Watch Empire. The Money Is in the Necklaces.
Everyone files Richemont under Swiss watches. But in FY2025 its Jewellery Maisons booked €15.3 billion at a ~32% margin, while the famous watchmakers fell to €3.8 billion and a 5.3% margin. The hard-luxury moat is a high-jewellery moat wearing a watch on its wrist.
Comes with a free Moat Anatomy Canvas template — plus a worked example for Richemont (Cartier).
Say "Richemont" to anyone who follows luxury and they picture a vault of Swiss watchmaking — IWC, Jaeger-LeCoultre, Vacheron Constantin, the whole horological cathedral. It's a beautiful image. It's also where the money isn't. In the year to March 2025, the division that makes all those watches — Richemont's Specialist Watchmakers — saw sales fall 13% to roughly €3.8 billion and posted a 5.3% operating margin.1 In the same year, the Jewellery Maisons booked €15.3 billion at around a 32% margin and a €4.9 billion operating result.1 One division earns four times the revenue at six times the margin. Guess which one gets the headlines.
The official story is that Richemont is a hard-luxury house built on watchmaking heritage. The truer story is that Richemont is a jewellery oligopoly — anchored by Cartier and Van Cleef & Arpels — that happens to own a portfolio of watch brands operating, in effect, as a prestige cost centre. The watch on the wrist is marketing. The necklace is the business.
The thesis: a jewellery moat wearing a watch on its wrist
Here is the claim, plainly: Richemont's durable advantage is not horology, where it competes against Rolex, Patek, and the entire Swiss valley on craftsmanship. It is the structural scarcity of legendary jewellery houses — and there are only a handful of them on earth. Cartier and Van Cleef & Arpels are two. You can build a new watch brand; people do it constantly. You cannot build a hundred-year-old jewellery maison, because the only ingredient that matters is the century. The moat isn't in the metal. It's in the name that has been on the box since before your grandmother was born.
| Jewellery Maisons | Specialist Watchmakers | |
|---|---|---|
| Sales | €15.3B | ~€3.8B |
| Operating margin | ~32% | 5.3% |
| Direction of travel | +8% | −13% |
| Headlines it gets | Few | Most |
Why the margins refuse to converge
A 32% margin sitting next to a 5.3% margin inside the same company is not an accident of one bad year — it's the signature of two different competitive structures. Watches are a fragmented, hyper-competitive craft category where dozens of houses fight over the same connoisseur and the same complication; a slowdown in China or a soft year for collectors hits the whole valley at once, which is exactly why Richemont's watch sales swung down double digits while jewellery kept climbing.1 High jewellery behaves differently. It is closer to an oligopoly of trust: a buyer spending six figures on a Cartier or Van Cleef piece is buying the certainty that the name will still mean something in fifty years, and only a tiny club of houses can credibly promise that. Scarcity of credible suppliers is the whole moat — and a Morningstar analyst put it bluntly, calling jewellery "one of the fastest-growing, very moaty luxury niches" and naming Cartier and Van Cleef & Arpels as "the industry's strongest brands."7
“...one of the fastest-growing, very moaty luxury niches... [Richemont holds] the industry's strongest brands — Cartier and Van Cleef & Arpels.”7
There's a second, quieter mechanism underneath the brand: distribution. Richemont sells most of its goods straight to the customer, with direct-to-client representing more than 76% of group sales and the retail channel alone at 70% in the first half of FY2026.4 That matters because the boutique is where margin lives. When Cartier sells you a Love bracelet across its own counter rather than through a wholesaler, it keeps the full spread, controls the price, and owns the relationship. The same six months saw the Jewellery Maisons run a 32.8% operating margin on €7.7 billion of sales.4 Owning the shop is how a strong brand turns into a strong income statement.
How a tobacco company ended up owning Cartier
None of this was the original plan, which is the part most retellings get wrong. Richemont was not born a luxury group. It was spun off in 1988 by Johann Rupert from the South African Rembrandt Group, and at founding it bundled tobacco assets like Rothmans International alongside the luxury holdings.6 The Cartier connection ran through the family, not the listed company: Anton Rupert's group acquired a majority stake in Cartier after Robert Hocq's death in 1979, and the brand was only folded into the structure that became Richemont's over the following years.6 The neat line "Richemont acquired Cartier in 1993" is a tidy fiction — what happened in 1993 was that Cartier was grouped inside the Vendôme Luxury Group, of which Richemont owned 70%, with the remaining 30% bought out in 1997–1998.6 Cigarettes funded the foundation; jewellery became the inheritance.
And the founding legend is just as romanticised as the corporate one. "Cartier was founded by Louis Cartier" is repeated everywhere; the house was actually founded by Louis-François Cartier, the grandfather, and it was three grandsons who turned a Paris workshop into a global maison in the early twentieth century.5 The pattern is consistent: the myths simplify, and the simplification always flatters the brand. Which is precisely the asset — a story old enough and burnished enough that the details stop mattering.
Then why keep the watch business at all?
The fair objection is that calling the watches a cost centre is too cute. The Specialist Watchmakers aren't a rounding error — they did roughly €3.8 billion in FY2024 at a respectable 15.2% margin before this year's collapse,2 and watchmaking is the heritage scaffolding that makes the whole "hard-luxury" identity legible to customers and credible to the trade. There's truth in that. A group with Vacheron Constantin and Jaeger-LeCoultre on its shelf carries a horological authority that a pure jeweller cannot buy. But notice what the numbers do across cycles: when conditions turn, watch margins fall from 15.2% to 5.3% in a single year while jewellery holds near 32%.21 One division is the shock absorber; the other is the engine. By FY2026 the same split held — jewellery up to roughly €16.5 billion and a 30.5% margin, watches drifting down to about €3.1 billion.3 The watches aren't worthless. They're just structurally subordinate — beautiful subsidies for a story the jewellery cashes.
Conglomerates love to present themselves as one coherent thing — a 'hard-luxury house,' a 'mobility company,' a 'platform.' The segment disclosures usually tell a different and more honest story. When one division earns a 32% margin and another earns 5%, you are not looking at a single business; you are looking at a profitable core and a prestige attachment that shares a logo. The discipline is simple: find the division with the durable margin, ask what protects it, and treat everything else as either a feeder or a flag. For Richemont, the durable margin lives in a club of jewellery names that can't be reproduced — and the watches, for all their craft, are the flag.
So the next time Richemont is described as a Swiss watch empire, remember which arm carries the company. The watches supply the romance, the heritage, the reason a customer believes the group knows what it's doing. The jewellery supplies the cash. Richemont's moat was never a tourbillon you can admire under a loupe — it's a name on a red box that took a hundred and seventy years to make and that nobody can build a substitute for in a boardroom. It out-located its own marketing: the world keeps watching the wrist while the real fortune sits around the neck.
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Sources
Where this comes from — the filings, records, and reporting behind it.
- 1Richemont FY2025 group sales reached €21.4 billion, led by Jewellery Maisons (Buccellati, Cartier, Van Cleef & Arpels, Vhernier) at €15.3 billion, up 8%, with a ~32% operating margin and €4.9 billion operating result; Specialist Watchmakers sales fell 13% to approx. €3.8 billion with a 5.3% operating margin.
- 2Richemont FY2024 annual results: Specialist Watchmakers sales €3.8 billion (down 3% at actual rates, +2% at constant rates); operating margin 15.2%. Jewellery Maisons sales rose 6% at actual rates (+12% constant). Group operating profit €4.8 billion, 23.3% margin. Net cash position €7.4 billion.
- 3Richemont FY2026 full-year results: Group sales €22.4 billion (+11% constant rates); Jewellery Maisons sales up 14% at constant rates to ~€16.5 billion with €5 billion operating profit and 30.5% operating margin; Specialist Watchmakers sales down 4% at actual rates (€3.1 billion) but up modestly at constant rates.
- 4Richemont FY2026 H1: Jewellery Maisons (Buccellati, Cartier, Van Cleef & Arpels, Vhernier) sales reached €7.7 billion in H1, +9% year-on-year (+14% at constant rates), with operating margin at 32.8% and €2.5 billion operating result; direct-to-client sales represented more than 76% of Group sales; retail channel 70% of Group sales.
- 5Cartier was founded in 1847 when Louis-François Cartier (1819–1904) took over the workshop of his master Adolphe Picard (some sources name him as 'Bernard Picard') at 31 Rue Montorgueil in Paris, registering his first maker's mark in April 1847. The company remained under family control until 1964. It was the three grandsons — Louis, Pierre, and Jacques — who built the brand internationally in the early 20th century, not the founder.
- 6Richemont was founded in 1988 by Johann Rupert as a spin-off from the South African Rembrandt Group, initially grouping tobacco (Rothmans International) and luxury assets together — it was not a pure-play luxury group at inception. Cartier came under the Rupert family's corporate umbrella when Anton Rupert acquired a majority stake after Robert Hocq's death in 1979. Vendôme Luxury Group (70% Richemont-owned) was formed in 1993 and held Cartier. Richemont bought the remaining 30% of Vendôme in 1997–1998. The Rupert family today holds ~9–10% of equity but controls ~51% of votes via unlisted B-shares.
- 7Morningstar senior equity analyst Jelena Sokolova, in a client note, described jewelry as 'one of the fastest-growing, very moaty luxury niches' and Richemont as holding 'the industry's strongest brands — Cartier and Van Cleef & Arpels.' She also noted that jewelry brands were less aggressive with post-COVID price increases than leather goods, giving jewelry a relative value advantage.
- 8Richemont does not disclose Cartier's standalone revenue. Cartier's performance is reported within the Jewellery Maisons aggregate. Industry analysts consistently estimate Cartier accounts for well over half of Jewellery Maisons revenue, but this is analyst inference, not company disclosure. Cartier operates more than 200 stores in 125 countries (per Wikipedia) or 200 boutiques in 60 countries (per Cartier's own stated boutique footprint — note the discrepancy in country count between sources).