PARIS — Exports of Swiss watches posted double-digit growth in December, suggesting high-end timepieces may sidestep turbulence in the economy thanks to robust business in Hong Kong, Russia and the Middle East.
This story first appeared in the January 30, 2008 issue of WWD. Subscribe Today.
Capping a “particularly good” year for Swiss firms, the value of Swiss watch exports grew 13.8 percent in December, the Federation of the Swiss Watch Industry said Tuesday.
Overall, watch exports bounded 16.2 percent over the full year to 15.96 billion Swiss francs, or $13.31 billion at average exchange rates, underscoring a “record year of growth unrivaled over the last 18 years,” the federation said.
Despite signs of difficulty in the global economy, most watch executives remain bullish for the coming year. Fawaz Gruosi, the owner of de Grisogono, said in an interview last week that meeting demand remained his greatest challenge.
Earlier this month in Geneva, Gruosi introduced two new luxury wristwatches, one limited to 177 pieces. Gruosi said 100 of the pieces were already preordered.
Meanwhile, Georges-Henri Meylan, who runs Audemars Piguet, said he, too, had difficulty filling orders.
“I don’t see why we should have any problem this year,” he said at the introduction a week ago of a watch Audemars designed with Chanel that is expected to retail for 19,000 euros, or $27,740 at current exchange.
Growth remains particularly robust at the top end. The Swiss federation said exports of 18-karat gold pieces grew 24.9 percent in 2007, as exports of steel watches gained 14.7 percent.
Timepieces retailing for 3,000 Swiss francs, or $2,500, and over at export price grew 25.3 percent in 2007. That is on top of growth of 16.7 percent in 2006.
Despite the impressive numbers, two key markets for Swiss firms — the United States and Japan — posted less staggering numbers than the fastest growing markets.
Swiss watch exports to the U.S. gained 6.7 percent last year to 2.44 billion Swiss francs, or $2.03 billion, while exports to Japan declined 4.7 percent to 1.21 billion Swiss francs, or $1 billion.
Hong Kong, in comparison, rocketed 25 percent to 2.43 billion Swiss francs, or $2.03 billion. Most countries across Europe, except Germany, logged strong double-digit gains. And sales to Russia grew 57.4 percent to 322.1 million Swiss francs, or $268.7 million. Sales to China grew 43 percent to 577.6 million francs, or $481.8 million.
In separate news Tuesday, Swatch Group, which operates brands Omega, Breguet and Swatch, said it had signed a letter of intent to buy a building in Biel, Switzerland, at which to establish Tiffany & Co.
Swatch Group and Tiffany in December sealed a 20-year strategic alliance for Swatch to manufacture and design Tiffany timepieces. Swatch said the building where Tiffany will be located would cost 2.7 million Swiss francs, or $2.4 million.