Frédérique Constant's Classic Worldtimer watch

PARIS — Exports of Swiss watches resumed their downward trajectory in April with a 5.7 percent decline, the Federation of the Swiss Watch Industry said on Tuesday.

It noted the contraction — coming after a rise in March — was less severe than expected despite three fewer working days in the month. “The trend therefore remains close to the figure posted at the end of March,” the federation said in a statement.

Sales of Swiss timepieces reached 1.5 billion Swiss francs, or $1.5 billion at average exchange, during the period. For the first four months of the year, the variation was minus 3.6 percent.

Sales in Hong Kong, the number-one market for Swiss watches, fell 16.8 percent in April, while the U.S. recorded a 19 percent drop. Exports to China, meanwhile, increased 38.9 percent, and the U.K. posted a 30 percent jump.

While sales of watches made of precious metal continued to bear the brunt of the decline, falling 12.9 percent, revenues for steel watches declined by a more modest 2.4 percent. Bi-metallic timepieces bucked the trend, posting a 6.2 percent increase.

The steepest drop came from wristwatches in the category of less than 200 Swiss francs, or $200, which fell 21.8 percent in value terms.

Luca Solca, head of luxury goods at Exane BNP Paribas, said that adjusted for working days, Swiss watch exports would have risen by 7 percent to 8 percent in April, adding that the market appears to have priced in “more than a moderate improvement.”

Nonetheless, the persistent decline in the Hong Kong market and the fall in the entry price segment were causes for concern. “This points to a low likelihood of a strong wholesale rebound and indicates that smart watches may be eating into the cheaper Swiss made market,” Solca said in a research note.

Citi noted that Swatch Group and Compagnie Financière Richemont have performed strongly over the past six months despite volatile demand patterns, significant pressure on margins, and limited visibility on the timing and magnitude of a recovery in sales and margins.

“The April data is disappointing and will raise concerns over the timing of any tangible restocking cycle,” it added.

Dollar figures are converted at average exchange for the period to which they refer.

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