What's going on?

Richemont, the world�s largest luxury watch and jewelry company � and Cartier owner, warned investors on Friday that a fraught geopolitical climate and weakening global economy were encouraging the �have yachts� to go easy on their wallets.

What does this mean?

Competitors LVMH and Kering sailed through their quarterly updates, but Richemont is big on flashy watches and potential buyers appear to have been spooked by talk of trade wars � particularly in China and Hong Kong, some of its biggest markets. In the last six months, Richemont�s sales were 8% higher than a year ago but missed investors� expectations and its profit fell by almost 10%.

Why should I care?

For markets: Time for investors to pay closer attention.

There was a hint of things to come in September when data showed that global exports of Swiss watches fell nearly 7% versus a year ago. Indeed in early September, Richemont said its sales were on track to rise by 10% but it only managed an 8% rise come month-end. And the pain wasn�t limited to just Richemont, whose shares fell 6% � shares of fellow Swiss watchmaker Swatch fell, too, by 5%.

The bigger picture: Luxury retail 2.0.

Richemont is going digital and, for the first time, it offered a glimpse of online subsidiary Yoox Net-a-Porter�s performance. Sales from the Milan-based ecommerce platform swelled by 21%, and the boost means that around 14% of all of Richemont�s sales are now online. The shift toward ecommerce will help mitigate some of the effects of falling profit, as websites and apps are cheaper than running physical stores. But luxury shoppers can be harder to satisfy than other shoppers, so costs may not drop as much as some investors hope.