Swiss watch exports post biggest quarterly drop since 2009

Bloomberg

Swiss watch exports posted the biggest quarterly drop since 2009 as the industry faces declining demand in all its main markets.
Shipments dropped 8.9 percent in the first quarter, adjusted for working days, according to data from Switzerland’s customs office. Exports declined 16 percent in March to 1.5 billion francs ($1.5 billion), the lowest level for that month in five years, the Federation of the Swiss Watch Industry said in a separate statement.
The decline was 38 percent in Hong Kong, 33 percent in the U.S. and 14 percent in China.
“What’s most surprising is that almost all top markets are in the red,” said ZuzannaPusz, an analyst at Berenberg in London. “Even if you adjust for the tough comparison base, it’s a really big drop. And what’s most worrying is that there’s no clear outperformance elsewhere, no shift to another region to partially make up for what’s lost in Asia.”
A boom in recent years in demand for Rolex, Omega and Cartier timepieces has turned to bust as Swiss watchmakers confront a laundry list of challenges. That’s led to job-cut negotiations at Cartier, VacheronConstantin and Piaget. It’s also led some brands to reshuffle management: ParmigianiFleurier’s interim CEO resigned last month just five months after he replaced outgoing Jean-Marc Jacot.
The export figures contrast with Swatch Group AG Chief Executive Officer Nick Hayek’s comment in an interview with Le Temps earlier this month that the industry is healthy. He was quoted in the newspaper saying the Swiss franc is completely overvalued, causing terrible damage in Switzerland. Hayek has said he wants to avoid job cuts in the downturn.
“It’s not a good number,” said John Guy, an analyst at MainFirst Bank in London. “But we also had no great expectations going into the March exports. We do expect April to improve, and if that remains soft.”