Luxury jeweler Mauboussin sees French tax hikes blighting sales

Wed Oct 8, 2014 1:12pm EDT
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By Astrid Wendlandt and Pascale Denis

PARIS (Reuters) - French jeweler Mauboussin is braced for no better than flat sales next year as it sees higher taxes and the general economic malaise hitting discretionary spending by consumers in its home market, the company's chief executive said.

French President Francois Hollande has been raising taxes since he came to power in 2012 to help plug the country's budget deficit but this year the hike has hit middle classes particularly hard.

Mauboussin, one the country's leading privately owned jewelers, which makes more than 70 percent of its sales in France, said it had become even more pessimistic after people received their tax bills last month.

"I think people will prefer to cut their discretionary spending than eat into their savings after the tax hike we have had," Alain Nemarq told Reuters.

"So I have prepared a budget for next year based on zero growth," he added.

With a history dating back to the 19th century, Mauboussin is the type of jeweler favored by upper and middle class French consumers, offering engagement rings for just under 600 euros ($760), diamond wedding bands for 1,105 euros as well as more elaborate jewelry pieces for 15,000 to 25,000 euros.

In a sign of the times, the firm, which had a store since 1946 on Place Vendome, one of the world's most prestigious addresses for jewelers, said it was moving next door to rue de La Paix where it says there is more traffic.

"I think Place Vendome has become a little intimidating for people, particularly for French consumers, as they think there are only super expensive brands there for only very wealthy people," Nemarq said.   Continued...

A view shows the logo of French watch and jewellery brand Mauboussin at their store on  the Place Vendome in Paris, October 8, 2014. REUTERS/Christian Hartmann