Swiss Watches, Down in the Dumps

According to the latest data published by the Swiss Watchmaking Federation, Swiss watch exports accelerated their rate of decline, a very bad news because these exports serve as an early barometer of the demand for these products, facing to a complicated Christmas period, which is the most important sale period of the year.

The figures leave no room for doubt: the fall is mainly due to the declining demand in China, affected by slower economic growth and government measures against corruption. Sales in Hong Kong –common destination for the Chinese- fell by 28% year to year, ten percentage points more than only three months ago.

In other markets things do not look much better. Exports to the US dropped 5.3%, while the German market fell more than 4%. Both markets definitely abandon the upward trend of the first half of the year. Meanwhile, there are two markets which maintain the positive tone amid the crisis: Japan, growing at rates of 9% and the UK, the most positive market with an increase of 14.3%.

The most affected brands by the news have been the owners of major brands such as LVMH (Tag Heuer, Zenith), Richemont (Cartier, Vacheron Constantin, Roger Dubuis, Jaeger-Le Coultre) and Swatch. Beyond the past poor outcome, the worst is that the trend is still downward, at least until the situation in China and other emerging markets will stabilize and allow sales in these countries to recover.