The recession has taken its toll at luxury goods group Richemont which includes jewellers Cartier, watchmaker Piaget, penmaker Mont Blanc and leather goods brand Alfred Dunhill.

Sales for the first five months of its financial year up to August fell by 16% as the economic downturn really began to catch up with its wealthy customers.

Chairman Johann Rupert said first-half profits would be “significantly below” the previous year's.

Unsurprisingly the decline in sales of posh watches, pens and jewellery was biggest in the United States, Europe and Japan where the banking crisis hit most fiercely and less pronounced in areas which avoided the worst of the financial crisis including the Middle East.

Rupert is not betting on any immediate recovery in the world economy. He told shareholders at today's annual meeting in Geneva: “Although the rate of decline in sales is slowing, we still urge caution. 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.”

The company posted an operating profit of 982 million (£861 million), 12% lower than a year earlier and Rupert pointed out that while sales in the group's own stores had fallen by only 7% its wholesale revenues were down 21% as other stores, particularly in the US, cut back on how much stock they held.