Swiss watch exports run slow, hurt by smart watches

Swiss watch exports posted their first annual drop in six years, hurt by slumping demand for less-expensive timepieces competing for buyers with Apple and other smart watch makers.

December exports declined 3.8%, pushing shipments down 3.3% on the year to 21.5 billion Swiss francs (€19.6 billion), the Federation of the Swiss Watch Industry said yesterday.

That compares with a 1.9% rise the previous year.

Timepieces costing 200 francs to 500 francs — which comprise about 15% of volumes — suffered the most last month, slumping 15%.

The Swiss watch industry is grappling with a raft of problems: Tumbling stock markets, fewer wealthy Asian tourists shopping in Europe and the arrival of the Apple Watch, which has weighed on sales of lower-priced timepieces and prompted brands such as Montblanc and TAG Heuer to introduce electronic functions of their own.

“The 200-franc to 500-franc price segment has always faced a lot of competition, like from fashion brands,” said Patrik Schwendimann, an analyst at Zuercher Kantonalbank.

“Those watches probably had even more to fight with last year with the rise of the smart watches.”

While exports to Hong Kong continued their slide in December, falling 21%, China recorded a 5.5% advance, benefiting from a favourable comparison base.

— Bloomberg