UPDATE 1-Richemont shrugs off Hong Kong protests as jewelry shines

Silke Koltrowitz

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ZURICH, Nov 8 (Reuters) - Luxury goods group Richemont said political protests in Hong Kong weighed on sales growth in the six months to Sept. 30, but strong demand in the rest of China, Korea, Japan and the United States more than made up for this.

"All regions, distribution channels and business areas posted higher sales, notwithstanding a double-digit sales decline in Hong Kong SAR, China, where stores were closed during protests," the maker of Cartier jewelry and IWC watches said in a statement on Friday.

Demand for Swiss watches has been subdued, notably due to unrest in key market Hong Kong, but Richemont has fared better than watch-focused Swatch Group thanks to its presence in the faster-growing jewelry category.

Sales at Richemont rose 9% to 7.397 billion euros ($8.17 billion) in the first half of its 2019/20 fiscal year, and net profit was broadly stable at 869 million euros, excluding a 1.4 billion euro one-off gain in the year-ago period, the world's second-biggest luxury good group said.

The growth rate was 2% at constant exchange rates and without online distributors Yoox Net-a-Porter and Watchfinder that the group bought last year to boost online sales.

Growth and profitability were driven by the group's jewelry brands, while watch labels again saw lower sales in the wholesale distribution network, Richemont said.

In September, it acquired Italian jeweler Buccellati that will join the Cartier, Van Cleef and Piaget brands in Richemont's jewelry portfolio. Jewelry's strong appeal was also highlighted last week by LVMH's $14.5 billion bid for Tiffany & Co..

Hong Kong retail sales of jewelry, watches, clocks and valuable gifts dropped 47.1% in August and 40.8% in September, data showed last week, as anti-government protests scared off tourists and battered spending in the Chinese-ruled city.

($1 = 0.9052 euros) (Reporting by Silke Koltrowitz; Editing by Michael Shields)