Luxury retailers are latest to feel the chill

The news echoed last week's shock revelation from British luxury fashion chain Burberry that its sales in the three months to 31 December were "modestly" behind its own internal plans.

The seller of the £1600 Medal Studs Warrior handbag saw its shares plunge 16% on the day, and they now sit at a more than two-year low of 405p.

Richemont said its sales in the final three months of 2007 were just 8% ahead at e1.67 billion (£1.24 billion), which was well below analysts' forecasts of at least double-digit growth and behind the 11% rise seen in the first half of the group's financial year.

More worryingly, once the euro's strength is stripped out, the Swiss-based group's sales for the quarter rose by 14%, but for the key final month of December by just 10%.

The sudden slowdown in spending on luxury goods ranging from watches to perfumes and fountain pens to leather goods is a clear signal that the credit crunch is really starting to hurt the affluent as well as the poor.

Even if consumers are not yet being hit in their own pockets, the looming fears of recession, particularly in the US, is making them more wary of splashing out on the unnecessaries of life as sold on Hollywood's Rodeo Drive.

Investment bankers are increasingly worried about the prospects for the flotations of Prada and Salvatore Ferragamo, which had been pencilled in for this summer.

Prada, which could be valued at anything up to e5 billion, yesterday denied it has set a timetable for a listing on the Milan Stock Exchange, insisting it had not moved on from December's statement that it "is considering an initial public offering in 2008".

Shoe company Ferragamo has yet to reveal plans for its float but has appointed JPMorgan Chase and Mediobanca as financial advisers.

Richemont said it had enjoyed good underlying growth in October and November but that in the final month "demand in the US and Japan slowed somewhat".

Richemont, the world's third-largest luxury goods firm after LVMH and PPR, follows Tiffany in cautioning that it is seeing a downturn in the US. The American firm saw a 2% fall in sales in the same three months, with a far bigger downturn at Christmas than Wall Street had expected.

By contrast, Swatch, the Swiss owner of the Omega and Breguet, posted an 18% rise in sales last year with no apparent sign of a tailing-off.

Richemont's US sales were static in the latest quarter at e327 million while those in Japan fell 6% to e215 million. The group said its strongest sales, up by mid-double digits, during the quarter were in Asia-Pacific and Europe. European sales were 10% higher at e753 million while those in Asia-Pacific rose by 21% to e378 million.