Europe is at risk of becoming nothing more than a tourist attraction for wealthy Chinese if it does not reform, head of luxury goods group Richemont Johann Rupert said.
Rupert, the South African chairman and chief executive of Richemont told a results conference call on Wednesday that a few years ago he had said, “If people do not watch it Europe will become an open-air museum for traveling Chinese…Well, we are halfway there.”
Rupert added, “You cannot work 35 hours a week, want to retire by 50 with full pension, have eight weeks of holiday and expect to be bailed out by people who work their butts off either in northern Europe or in China. Life does not work like that.” Currently, South Africans are debating how much credit they should extend to Europe.
For its 2011-12 financial year, the Swiss company reported a 46 percent sales increase and said purchases by tourists in Europe–primarily from China–helped make up for sluggish demand in southern Europe, where government austerity measures are hurting consumers. Competitors including LVMH, Hermes, luxury and retail group PPR and Bulgari have also posted upbeat quarterly results as Chinese buyers flock to stores in Asia and Europe.
Rupert’s South African family controls Richemont, and he fears trends that were hurting demand for luxury goods in countries like Italy could spread elsewhere.
Pictured: Jaeger-LeCoultre is under the Richemont umbrella.