PARIS — The outlook finally appears to be looking brighter for the Swiss watch industry.
After 20 consecutive months of declining exports, sales of Swiss timepieces saw a 7.5 percent uptick in March, reaching 1.6 billion Swiss francs, or $1.6 billion at average exchange, according to data released by the Federation of the Swiss Watch Industry on Thursday.
“This welcome result must, however, be placed in perspective because it benefited from two extra working days and a particularly favorable base effect,” stated the federation.
Analysts estimated that adjusted for calendar effects, sales still dropped, by around 2 percent. Yet after nearly two years of declines impacted by the crackdown on luxury gifting in China and a slowdown in Hong Kong — the biggest international market for Helvetic timepieces — as Chinese tourists chose other travel destinations, the uptick was seen as reassuring.
“The March data is likely to be seen as a turning point in the destocking cycle led by Mainland China and Hong Kong,” wrote Citigroup analysts Thomas Chauvet and Silky Agarwal in a research note.
“The investment case in hard luxury hinges on the continuation of this nascent recovery,” commented Luca Solca, sector head of luxury goods at Exane BNP Paribas.
Sales in Hong Kong grew 18.1 percent in March. Although observers noted signs of recovery over recent months, it was the first time in more than two years that sales there grew.
Exports to China, meanwhile, increased 37.7 percent, cementing its recovery.
While sales of watches made of precious metal continued to decline, falling 0.7 percent, revenues for steel watches grew 12.5 percent and jumped 15.1 percent for bi-metallic timepieces.
The strongest growth came from wristwatches in the 200 to 500 Swiss francs, or $200 to $500 price range, which grew 21.1 percent in value. The only price category that saw declining sales was less than 200 Swiss francs, or $200, although sales of these timepieces also increased in value, by 6.2 percent.
Sales to the United States grew 15.6 percent, although the market is negative in the midterm, the federation observed.
In Japan, exports grew 8.3 percent, while in the United Kingdom, they were up 15.2 percent, boosted by the weak pound. Sales fell, however, in the other main European markets, as well as Singapore and the UAE, the federation said.
Dollar figures are converted at average exchange for the period to which they refer.