PARIS — The decline in exports of Swiss watches slowed down for the second month in a row in August. Still, demand in most markets, except for China, remained subdued.
The Federation of the Swiss Watch Industry reported that exports of timepieces fell 22 percent in August to 842.6 million francs, or $815.9 million at average exchange rates for the period, which is below the level of exports logged in August 2006.
Since January 2009, watch exports have declined 25.9 percent, reflecting shrinking demand for expensive timepieces amid the economic crisis, which has caused the entire Swiss watch industry to decline.
Citi analyst Thomas Chauvet noted despite the improving export trends, retailers are still destocking their inventories. As a result, he’s forecasting a 20 percent decline in Swiss watch exports in 2009.
“However, the combination of improving economic indicators and a much softer basis of comparison from October onwards argue for a potential recovery in the fourth quarter of 2009 and the first quarter of 2010,” Chauvet wrote in a note to clients.
Traditionally a quieter month for exports, August saw 1.1 million watches exported from Switzerland, 590,000 fewer timepieces compared with August 2008, the federation said.
Exports to Hong Kong fell by 26 percent, while U.S. demand declined 37 percent. In contrast, demand jumped 20 percent in China.
The watch category least affected by the downturn was the 200-500 francs range at export value, or $195-$485 at current exchange rates,which declined 15 percent.
Exports of watches priced over 500 francs, or $485, did better in August compared with the preceding months, but were still 22.8 percent below August 2008 levels.
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