Swiss watch exports slide on poor HK sales
Print Edition
SWISS watch exports fell for the first time in six years in 2015, as the key Hong Kong market tanked, an industry body said yesterday.
After several years of record growth, exports lost 3.3 percent to 21.5 billion francs (US$21.1 billion), the Federation of the Swiss Watch Industry said.
In 2014, Swiss watchmakers clocked a record 22.2 billion Swiss francs in exports — up 1.9 percent from 2013.
Last year’s drop was the first since the sector was slammed with a sharp slowdown in 2009 in the aftermath of the global financial crisis.
Last year’s slump was closely linked to a 9.1 percent fall in demand in Asia, the main market for Swiss watches, which absorbed exactly half of all the exports last year.
In particular, “development of the Hong Kong market weighed heavily in the overall balance,” the federation said, adding that the key market for luxury timepieces contracted 22.9 percent.
The market had undergone “a major readjustment linked in particular to exchange rates and consumer trends,” it said.
The decline in watch exports by nearly a quarter in the city had exerted “a strong negative effect on the result worldwide,” the group said.
China’s anti-graft drive
Exports to the Chinese mainland were also down 4.7 percent last year, though they were seen improving toward the end of the year, gaining 5.5 percent in December, it said.
Exports to China have yo-yoed in recent years, first raking in several years of double-digit growth before taking a hard hit following efforts to crack down on corruption in the country by banning extravagant gifts like expensive watches to government officials.
Overall, “the general context did few favors for the branch,” the report said, pointing to the changes in Hong Kong as well as the economic slowdown in the Chinese mainland, tensions in the Middle East, the low level of the ruble and terrorism among other factors.
The over-valuation of the Swiss franc since the Swiss central bank in January last year suddenly decided to stop artificially trying to hold down its value against the euro had also dealt a blow to exports from the wealthy European country, the federation said.
“This situation will continue to influence results for the Swiss watch industry in the first part of 2016, which moreover will suffer from a generally unfavorable base effect,” it said.
As a consequence, Swiss watch exports “are likely at best to achieve the same value this year as in 2015.”
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