Month-to-month Swiss watch exports suffered their greatest decline since 2020 as demand for premium and luxurious timepieces in key markets together with China and Hong Kong plunged.
Exports dropped 16 % by worth in March to 2 billion Swiss francs ($2.2 billion) from a yr earlier, the Federation of the Swiss Watch Business mentioned Thursday.
Shipments to China, the second greatest marketplace for Swiss watches, slid 42 %, falling under ranges seen in March 2020 when the trade got here to a halt on account of pandemic lockdowns. Shipments to Hong Kong plummeted 44 %.
“The damaging development is even worse than we anticipated and the decline in China is actually worrying and possibly signifies that inventories within the area have been as soon as once more too excessive,” mentioned Jean-Philippe Bertschy, an analyst at Vontobel in Switzerland.
Shares of Swatch Group, which makes the Omega and Longines manufacturers, hit a contemporary 52-week low on Thursday, dropping about 1 % in Zurich buying and selling. Shares of Richemont, the proprietor of Vacheron Constantin and Cartier, additionally fell about 1 %.
The sharp drop in exports underscores a worldwide decline in demand for Swiss timepieces, which loved an unprecedented increase starting in 2021 that lasted till the center of 2023.
Larger rates of interest, shaky financial progress and geopolitical conflicts have prompted watch consumers to rethink forking out on costly timepieces.
The Federation mentioned the variety of watches shipped from Switzerland in March dropped 25 % to 1.1 million models as retailers pulled again on orders.
Shipments to the US, which overtook China as the highest marketplace for Swiss watches in 2021, fell 6.5 % in March.
The declines have been throughout all value classes, with shipments of watches above 3,000 francs — which account for greater than 80 % of export values — falling about 10 % by worth. Exports of watches priced between 500 francs and three,000 francs dropped by 38 %.
Even the bottom class, watches priced under 200 francs — which incorporates Swatch Group AG’s widespread MoonSwatch collaboration — plummeted 19 % in March from the yr earlier than.
Demand for Swiss watches and luxurious timepieces surged throughout the pandemic as customers caught at house and flush with money from authorities stimulus measures rushed to purchase prime manufacturers, together with Rolex and Patek Philippe.
Hamstrung by provide chain points after halting manufacturing throughout lockdowns, many Swiss watchmakers couldn’t sustain and most manufacturers drove up costs.
By Andy Hoffman
Study extra:
Swiss Watch Exports Slowing After a File Run
Swiss watch exports hit report ranges final yr as watchmakers raised costs and shipments of cheaper quartz watches jumped, although the tempo of progress tapered off within the second half.
