Cartier’s parent company, Richemont, saw its shares slip by 6% after the company reported H1 2023 profits that missed forecasts amidst mounting economic struggles and rising geopolitical tensions across the globe.

Richemont’s ongoing struggles are shared by several other players in the luxury retail space, including LVMH, which are seeing a slowdown in demand for high-end products in the U.S. and European market.

Meanwhile, the Chinese market, which was seen as the lone bright star, has been experiencing its own share of problems because of its ongoing real estate crisis and record unemployment rates among the country’s youth population.

This ongoing global slowdown has wiped off $245 billion in stock value for seven of the largest luxury brands in Europe over the past six months, with LVMH alone reporting a 20% decline during the same time frame.

Richemont’s CEO Chairman Johann Rupert noted that while the global economic slowdown and geopolitical insecurities have negatively impacted demand, the full effects of rising interest rates were yet to be seen, Reuters reported.

“It’s no surprise to us that the market will slow down and across all asset classes because that’s the purpose,” Rupert said, pointing to high-interest rates.

While players in the luxury space are struggling, the U.S. tech sector is expected to emerge as an unlikely winner.

“The difference is that Tech is constantly creating ‘new new’ products at all price points, where luxury brand portfolios are largely stacked with many similar products at very high price points,” DataTrek cofounder Nicholas Colas said last month. “A Kelly bag in a new, rare leather does not count as disruptive innovation,” he said.