PARIS — Swiss watch exports receded slightly in April as exports to Hong Kong declined sharply, reflecting continued weak demand in the world’s number-one market.
Exports of Swiss timepieces for the month fell 0.8 percent to 1.82 billion Swiss francs, or $1.9 billion, according to the Federation of the Swiss Watch Industry. The cumulative increase since January was 2.1 percent, reflecting a phase of “consolidation,” the federation added.
Sales to Hong Kong, where pro-democracy protests have resulted in a sharp drop in Chinese tourists, plummeted 29.7 percent in April, a figure that “seems to be aligned with the reality of local sales,” it noted.
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Conversely, growth in China jumped 48.7 percent in the month, though this was likely distorted by temporary exports. “Ignoring these inputs, the result would be in the region of plus-10 percent,” the federation said.
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Sales growth slowed in the United States, which posted a 3.1 percent increase after a strong double-digit gain in March, while Japan registered a 5.7 percent decrease, due in part to a strong performance during the same period last year. In Europe, France posted growth of 16.5 percent and Italy progressed 11.9 percent.
There was a sharp decline in sales of watches made from precious metals, in particular gold timepieces, which saw a 15 percent reduction in unit terms and a drop of 9 percent in value terms. Sales of steel watches stagnated, while those made from a combination of gold and steel rose 4.4 percent in value terms.
Growth was driven by the lower end of the market, with the number of watches priced below 200 francs, or $208, increasing by 7.9 percent in unit terms. “Timepieces costing more than 3,000 francs were not a driving force in April and their value was down slightly,” the federation said.
Luca Solca, managing director for equities at Exane BNP Paribas, said in a research note that the continued outperformance of lower-priced watches versus higher-end timepieces pointed to a relatively better trading position for Swatch Group versus Compagnie Financière Richemont.
Swatch Group, which is scheduled to hold its annual general meeting in Grenchen, Switzerland, on Thursday, has a portfolio ranging from midpriced brands like Tissot, Hamilton and Calvin Klein watches and jewelry to high-end Breguet and Harry Winston watches. Richemont’s brands include Cartier, Vacheron Constantin, Jaeger-LeCoultre and Van Cleef & Arpels.