Swiss watch exports fall as global demand wanes

Zurich: Swiss watch exports fell in August as demand weakened from Japan to the United States, extending the industry’s slump to fourteen months.
Shipments dropped 8.8 per cent to 1.4 billion francs ($1.4 billion), the Federation of the Swiss Watch Industry said in a statement on Tuesday.
The slowdown has spread from Asia to Europe and the US in recent months, leading Cie. Financiere Richemont, the maker of Cartier and IWC Schaffhausen timepieces, to cut jobs, buy back unsold inventory from retailers and refocus on more affordable pieces.
Richemont warned that first-half earnings will decline about 45 per cent, following Swatch Group’s 54 per cent drop in first-half profit. In Europe, terrorist attacks have cut the numbers of free-spending tourists who make up a big chunk of sales.
"We remain concerned about continued disruption in Hong Kong, while mainland China continues to show improving trends, albeit at the expense of weaker tourist demand in Europe and Japan,” Thomas Chauvet, an analyst at Citigroup, said in a note.
Exports to Hong Kong fell 29 per cent, while shipments to Germany slid 15 per cent, the federation said. The US and Japan showed declines of 12 per cent and 27 per cent, respectively. Mainland China saw exports rise by 29 per cent, helped by a favorable comparison base from a year ago. One bright spot was the U.K., where shipments increased 24 percent after the Brexit-induced tumble in the value of sterling.
Some brands have already increased prices in the UK by at least 10 per cent, Citigroup’s Chauvet said, so the currency effect is unlikely to last.