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PARIS — Exports of Swiss watches continue to fall, declining 25.9 percent in July to 1.2 billion Swiss francs, or $1.12 billion, compared with the previous year, according to the Federation of the Swiss Watch Industry.
This story first appeared in the August 21, 2009 issue of WWD. Subscribe Today.
Since January, watch exports have fallen 26.3 percent to 7.3 billion francs, or $6.8 billion, reflecting wilting demand for expensive timepieces amid the economic crisis. Dollar figures are converted at average exchange rates for the periods to which they refer.
The Swiss watch industry has been in decline since the end of 2008, after five years of strong growth, with exports currently below 2006 levels.
Nonetheless, the July decline showed a modest recovery from June, when total exports fell 31.9 percent, the steepest decline since the beginning of the year.
Swatch Group Ltd., the world’s largest watchmaker by sales, last week raised hopes for the watchmaking sector as it reported better-than-expected first-half earnings and forecast a pick up in demand in the second half, as retailers start reordering amid an improving economy.
The company — whose brands range from brightly colored, inexpensive Swatch watches to handmade Breguet timepieces — was able to perform well in difficult markets thanks to its diversified portfolio.
Swatch Group Ltd.’s business model is also less dependent on premium brands, which have suffered the most in the current downturn, as highlighted in the Swiss export data for July.
Although all price segments declined in July, watches costing between 200 and 500 Swiss francs, or $186 to $466, held up best, with a decline of 7 percent.
More expensive ranges fell by more than 20 percent, while watches costing more than 3,000 Swiss francs, or $2,797, recorded a steeper fall than the others, falling more than 30 percent.
Gold watches suffered the biggest decline in value terms, while the performance of steel and bimetal timepieces was average, the federation said.
Exports to Hong Kong were sharply lower, down 31.7 percent, while the decline was even more sustained in the U.S., dropping 39.2 percent, as has been the case in previous months. The main European markets continued to hold up better.