Swiss luxury retail operator Richemont says its first half earnings fell 24 per cent – largely due to slowing demand in Asia.

The listed parent of a raft of brands including Piaget, IWC, Cartier and Shanghai Tang says sales in its key two markets China and Hong Kong fell two per cent year on year, eroding an increase in Europe, where the market is recovering. Asia accounts for about 40 per cent of the group’s sales.

Its profit fell from €1.19 billion last year to €908 million.

Sales of high end luxury or exclusive goods such as watches and cognac have been hit by an austerity drive in China; a clampdown on both corruption and the long tolerated tax avoidance of gift-giving.

So great is the reduction in watch sales, the company has reduced the work shifts of some 230 staff in one of its Swiss factories.

Exchange rates also impacted on Richemont’ bottom line. The company lost €239 million on contracts it uses to hedge against currency movements.

The slowdown in Asia has prompted the brand to reduce working times for 230 staff at one of its Swiss watch factories.

Luca Solca, an analyst at Exane BNP Paribas, said the results confirmed a difficult environment for the luxury goods sector.

“Sales in Asia Pacific – and China within it – seem to be on the back foot.”