Remy Cointreau hit by China slowdown

Remy Martin cognac

French spirits group Remy Cointreau has said that its full-year operating profits will see a "double-digit" decline after slower growth in China.

It blamed the fall on China's "sharp slowdown", together with an "uncertain economic environment" in Europe.

Shares in the firm closed down 8.3% and German fashion house Hugo Boss also saw its shares fall 2% on China worries.

But upmarket jeweller Tiffany said it had seen strong sales in Asia, which sent its shares 9% higher.

'Disappointing growth'

Remy Cointreau said sales for the six months to 20 September fell to 558m euros ($756m; £467m).

"Strong momentum" in the US and Europe failed to offset weakness in China, the firm said, where distributors were still trying to run down high stock levels.

Remy Cointreau

Last Updated at 22 Mar 2018, 16:39 GMT *Chart shows local time Remy Cointreau intraday chart
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Sales of Remy Martin cognac fell 10% in the half-year to 327.2m euros, mainly as a result of the problems in China.

Shares in Hugo Boss fell 3.4% after the company told investors that it would not meet its target of recording core operating profit of 750m euros in 2015. The shares ended with a loss of 2%.

The firm had set this target in 2011, but said global growth rates had been slower than expected.

"A particular concern is China," Reuters reported chief executive Claus-Dietrich Lahrs as saying.

"Compared to what we were used to, the long period of low-hanging fruit, China came down to a rather disappointing growth rate for the luxury industry in 2013."

The latest growth figures from China showed that in the July-to-September quarter, the economy grew by 7.8% compared with a year earlier.

That was up from the rate of 7.5% recorded in the previous three-month period, and the first rise in three quarters.

However, the rate is still slower than the pace seen in previous years. Last month, the International Monetary Fund said the slower pace of growth in emerging economies such as China was holding back global expansion.

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