PARIS – The summer season glow didn’t final lengthy for Swiss watches.
Exports in September contracted sharply, slumping 12.4 % in worth and 20.8 % in quantity, in line with figures launched by the Federation of the Swiss Watch Trade on Tuesday.
The business group stated it was “essentially the most marked of the yr” thus far, with a complete worth simply hovering above the two billion Swiss francs mark.
Month-to-month export tallies had seen a slight enchancment in July and August, though the FHS had expressed a unfavorable outlook for the remainder of the yr.
For the primary 9 months of 2024, the Swiss watchmaking sector noticed exports decline by 2.7 %.
September exports to China and Hong Kong, which have now gone right down to fifth and fourth place respectively in market rating by measurement, fell 49.7 % and 34.6 % year-on-year.
This can be a additional signal of the marked deterioration of the Higher Chinese language market, the place development is flagging on account of components together with excessive youth unemployment and an ongoing actual property market stoop.
These poor outcomes accounted for two-thirds of the month’s decline, in line with the FHS. The decline of those two markets, plus the ten.7 % and 13.9 % drops recorded for exports headed respectively to the U.Okay. and Singapore, made up 80 % of the worldwide decline.
The worldwide image was dim, with Asia coming off the worst with a 22.6 % decline for the area. Europe, the place Germany and Spain grew over 5 % every, was deemed “much less regarding” by the business physique regardless of its 3.4 % stoop.
One vibrant spot was the U.S., which grew a modest 2.4 % however consolidated its place because the main marketplace for Swiss timepieces. Japan, now in second place, rose by solely 2 % that contrasted with its summer season growth.
This mirrored the mixture of a stronger yen and diminished regional value gaps, in line with Citi anaylist Thomas Chauvet.
All materials classes had been impacted by the downturn in exports final month in unit numbers and worth, with metal watches persevering with their downward development. Volumes decreased by excessive double-digit percentages throughout all classes.
All value ranges had been affected, with a bell-shaped curve that noticed the mid-price vary between 500 and three,000 Swiss francs contract by a 3rd. Luxurious watches, at 3,000 Swiss francs and above at export value, declined 10.9 % and seven.3 % in quantity and worth respectively.
Calling the upper value level “comparatively resilient,” Bernstein’s Luca Solca stated in a analysis observe that there was “potential for gradual restoration, given the intent of the Chinese language authorities to enhance the economic system” with stimulus packages regardless of short-term demand woes affecting the entire luxurious business.
Though the higher efficiency of the high-end watches may very well be on account of larger product availability from manufacturers like Rolex, “this will likely result in broader luxurious watch resilience than anticipated,” Solca famous.
Chauvet additional identified that the Swiss watch export figures of the previous three months had been “fairly inconsistent with unfavorable sell-out developments,” in a analysis observe, as luxurious teams begin to report third-quarter earnings.
On Tuesday, LVMH Moët Hennessy Louis Vuitton reported a 4 % lower in natural gross sales for its watches and jewellery division within the third quarter of 2024, whereas the consensus estimate expects an 8 % stoop for Compagnie Financière Richemont’s specialist watchmakers forward of its Nov. 8 interim outcomes and a 5 % decline from the Swatch Group.
