PARIS — Swiss watch exports defied expectations by rising 15.4 percent in July, boosted by the continued popularity of gold timepieces, though weakness in the key markets of Hong Kong and China clouded the outlook for the rest of the year.
Foreign sales of Swiss watches in the month totaled 1.9 billion Swiss francs, or $2.02 billion at average exchange for the period, the Federation of the Swiss Watch Industry said.
“The sector therefore shows no obvious sign of losing its momentum in terms of exports, despite what was expected. This trend will be monitored closely at a time when some market segments have already registered a slowdown,” the FHS stated.
The volume of exported timepieces fell by 3.8 percent relation to July 2011, dragged down by an 8.3 percent decline in sales of watches costing less than 200 francs, or $205. By contrast, sales of timepieces costing more than 3,000 francs, or $3,075, rose 24.1 percent, maintaining their strong momentum.
Swiss watch exports to Hong Kong fell by 0.9 percent, while China posted a 9 percent decline, its second monthly drop. Europe showed a mixed performance, with strong increases in Italy and France, up 22.7 percent and 24.5 percent, respectively.
Sales in the United States slowed down slightly, though it still posted a 9.2 percent rise on the month.
Thomas Chauvet, luxury analyst at Citi, said the July figures may have been boosted by exchange rate fluctuations and a spike in sales in the United Arab Emirates.
“With legitimate concerns of a broad-based slowdown in consumer spending in China, economic pressures in Europe, negative wealth effects around the globe (property, commodities) and distortion from tourist-related demand, we believe Swiss watch exports will soften in the remainder of the year to single-digit growth reflecting weaker sell-out trends and high levels of inventories in the trade,” he added.