But after nearly two years of soft sales, stockpiles have been worn down considerably. And while government officials in China may still be cautious about conspicuous purchases, entrepreneurs are proud to wear fancy timepieces as a sign of their status.
Equally important is Richemont's crown jewel: Cartier. The jewelry brand accounted for a 69 percent of Richemont's operating profit in 2013, according to Bernstein estimates. And about 40 percent of Cartier's sales are jewelry, which has been resilient even in the face of slow watch sales.
Cartier also happens to be in one of luxury's fastest growing categories: branded jewelry. According to a recent McKinsey study, branded jewelry such as Cartier and Tiffany accounted for just 20 percent of global jewelry sales in 2011 but is likely to reach as much as 40 percent by 2020.
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Drivers of the growth include "new money" customers who are keen to flaunt their recently acquired wealth along with emerging-markets customers who want trusted brands. Younger customers are also more familiar with strong brands and will be drawn to them as they make some of their first luxury purchases.
Of course, jewelry won't be safe in the event of a serious economic slowdown such at the most recent financial crisis. Big-ticket purchases are easiest to delay in times of adversity and designs don't change as quickly as in other categories.
But investors are probably compensated for that risk with a reasonable valuation on the stock. At about 10.8 times forward earnings, before interest, taxes, depreciation, and amortization, Richemont is trading below its 10-year historical average of 13.2 times, according to FactSet.
While not flawless, Richemont may be an investment that shines for years to come.