Richemont and the Shift to Hard LuxuryNarrow moat

LVMH (MC) — moat facet

Hard luxury held up while fashion slowed, which is why the Tiffany purchase may prove strategically timed rather than merely expensive.

The most useful competitive fact of the current cycle is that not all luxury behaved the same way. As leather goods and fashion slowed through the China-led downturn, hard luxury — jewellery and high-end watches — proved more resilient, and Richemont was its principal beneficiary, posting the strongest growth among the large groups1.

Where the growth actually wasFashion & leatherslowed through the downturnHard luxuryjewellery and watches held upRichemontstrongest growth of the large groupsLVMH’s positionbought Tiffany for $15.8bn in 2021The open questionCartier is still larger in jewelleryWatch Watches & Jewellery growth against Fashion & Leather Goods.
LVMH had already bought into the category that turned out to be resilient.

This matters to LVMH for a specific reason: it bought into exactly this category at scale. Tiffany cost $15.8 billion in 2021, and the rebuild examined in the Future Bets has been the group's most successful integration in years. Watches and Jewellery is now a substantial division alongside Bulgari, and it grew while fashion did not.

The competitive question is whether LVMH can win in hard luxury the way it wins in leather goods. Jewellery buyers behave differently — the purchase is more considered, more often a gift or an investment, and the brands that dominate have done so for a century. Cartier, Richemont's flagship, remains comfortably larger than Tiffany in jewellery, and closing that gap is a decade-long project rather than a marketing campaign.

Watch Watches and Jewellery growth against the Fashion and Leather Goods division. Hard luxury outgrowing fashion for a sustained period would mean the Tiffany purchase was strategically timed rather than merely expensive.

Moat trajectory: Widening

Hard luxury proved more resilient than fashion through the downturn and Richemont was its principal beneficiary — and LVMH had already bought into the category, with Tiffany's rebuild now its most successful integration in years and Watches & Jewellery growing while fashion did not. Widening, subject to Cartier remaining comfortably larger in jewellery.

The number that tests this moat
Reported
Organic growth, Watches & Jewelry against Fashion & Leather Goods
+9% against −1% (H1 2026)

Jewellery and watches held up while fashion slowed, which favoured Richemont and justified LVMH's Tiffany purchase. The gap closing would mean fashion is recovering; a persistent gap, that the shift to hard luxury is lasting.

Source: LVMH H1 2026 results ↗
References
  1. Third-party estimateRichemont posted the strongest sales growth among the large luxury groups as hard luxury proved more resilient than fashion.
    Third-party luxury industry rankings and financials — LVMH leads the industry with luxury goods sales of about $59.9 billion out of roughly $83.2 billion total revenue and a net profit margin near 18.6%; Kering posted luxury goods sales of about $21.4 billion at an 18.3% net margin; Compagnie Financiere Richemont reported luxury goods sales of about $19.2 billion with the strongest sales growth among the large groups; Chanel, privately owned by the Wertheimer family, reported sales of about $17.2 billion at a net profit margin of approximately 26.7%, the highest among the major houses; in 2025 Kering lost second place in the industry to Richemont and third to Chanel, then ceded fourth place to Hermes — 2025-2026 · publ. 2026 · source ↗
Sources
Generated September 23, 2026