Swiss Watch Shipments Approach 35-Year Low
The country shipped 18.9 million watches in the 11 months through November, down 13% from a year earlier.
(Bloomberg) --
Switzerland is on track to export fewer watches than it has in any year since 1984 as demand for low-end timepieces plunges and the industry increasingly focuses on reselling secondhand Rolexes and Patek Philippes.
The country shipped 18.9 million watches in the 11 months through November, down 13% from a year earlier, the Federation of the Swiss Watch Industry said Thursday. That’s the latest sign it’s getting harder to find buyers for new timepieces.
The last year exports were so low was in 1984 at 17.8 million pieces, when the industry was in the tail-end of a crisis caused by competition from quartz technology. That’s also when the plastic Swatch emerged, breathing new life into Swiss watchmaking.
The Apple Watch and fitness bands have weighed on demand for lower-end watches, driving shipments of watches costing less than $200 down 20% in November. The slump bodes ill for Swatch Group AG, which relies on low- and mid-priced brands for the bulk of its earnings, according to estimates by Zuercher Kantonalbank.
“There is only one way that the lower-end volumes are going, and that is downwards,” said Deborah Aitken, an analyst at Bloomberg Intelligence. “Swatch needs to move up the value chain.”
Watchmakers are responding to the change in consumer demand by concentrating on timepieces that cost $3,000 and up, but the political turmoil in Hong Kong has cut demand in that traditional hub.
Exports fell 3.5% by value in November. Higher-end timepieces helped total exports rise 2% on that basis in the first 11 months of the year.
To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net
To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Thomas Mulier
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