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Zurich - Swiss watch exports fell in August as demand weakened from Japan to the US, extending the industry’s slump to fourteen months.
Shipments dropped 8.8% to 1.4 billion francs, 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%, following Swatch’s 54% 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%, while shipments to Germany slid 15%, the federation said. The US and Japan showed declines of 12% and 27%, respectively. Mainland China saw exports rise by 29%, helped by a favourable comparison base from a year ago. One bright spot was the UK, 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%, Citigroup’s Chauvet said, so the currency effect is unlikely to last.
