While reporting a 16% plunge in five-month sales, luxury goods maker Compagnie Financiere Richemont SA, on Wednesday, met forecasts and specified it is careful in spite of the indications of slowdown in the fall of its demands.

As per Chairman Johann Rupert, "We would prefer to wait until we have more evidence of a broader economic recovery before speculating on the likelihood of a better second half, particularly when it comes to the wholesale business."

During the month of April, the Geneva-based owner of the jewelry brand Cartier and a range of high-end Swiss watches such as Jaeger-LeCoultre witnessed a fall by 16% in sales, or 21% at constant currencies. Though no exact figures were available, but this was properly in line with market expectations.

It is in spite of the good business in Asia that the figures point trading conditions remain tough for Richemont. "The outlook is more pessimistic than elsewhere in the sector although that probably reflects corporate culture than anything else," said Kepler analyst Jon Cox.

Richemont price target was lifted to CHF30 from CHF25 by bank Vontobel because of a higher valuation of the sector and reaffirmed a hold rating.

A source said, "Most market watchers see an improving sales trend in the coming months, partly because the comparison with year-ago period - the downturn in the global economy began to bite the luxury industry in the second half of 2008 - will be more favorable."

As of now, Richemont seems to be in stable position to face the downturn, since it has no debt and a cash position of around EUR820 million.

But overall, the general situation remains difficult, specifically in the wholesale segment.

(via TopNews United Kingdom. Contributed by Sunil Kumar)