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Swiss Watch Exports Slump in March

Smartwatches, Weak Global Demand Threaten Recovery

Apr 24, 2016 8:33 AM   By Rapaport News
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RAPAPORT... Swiss watch exports plunged 16 percent in March as orders from Hong Kong and the U.S. slumped, evoking memories of the financial crisis amid a widening threat from smartwatches.

“The deterioration in Swiss watch exports since July 2015 gathered pace in March,” the Federation of the Swiss Watch Industry said. “The scale of the downturn is also unusual since we must go back to the crisis of 2009 to find variation of this order.”

The value of wristwatch shipments stood at $1.4 billion (CHF 1.37 billion), the lowest for March since 2011, as volume dived 20 percent to 1.9 million units. Watches made from all types of materials were hit by the decline. Exports of precious metals’ watches fell 17 percent to $513 million (CHF 502.1 million) and steel watches slid 14 percent to $549 million (CHF 537.4 million).

The retreat reflects continued pessimism in the Swiss industry, with a 2015 Deloitte report stressing watchmakers are increasingly concerned the threat from smartwatches is growing.

A recent study by Strategy Analytics estimated global smartwatch sales more than quadrupled in 2015 largely because of Apple’s debut. “The Apple Watch coming out of the gate has met only moderate commercial success in its first year, but has managed to 'move the needle' for the entire category,” the researchers noted.

The group expects smartwatch sales to surge 40 percent this year and maintain an “enviable” 33 percent advance annually through 2022.

Deloitte, meanwhile, added Swiss watch executives are also concerned about the impact of a stronger franc and weaker demand from countries such as China on the European nation’s watch industry.

In the first quarter of 2016, Swiss watch exports to Hong Kong, its largest market, plummeted 32 percent, while a 14 percent drop in exports to China in March “undermined the recovery which began to take hold at the end of last year,” the federation said. Shipments to the U.S. slid 15 percent during the first three months of the year.

Total exports dropped 9 percent to $4.76 billion (CHF 4.66 billion) during the quarter.
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Tags: apple, Apple Watch, deloitte, diamonds, gold, Rapaport News, Swiss watches, watches
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