Sat, Jun 20, 2015 - Page 13 News List

Exports of Swiss watches slump most since 2009

WINDING DOWN?Watch exports have fallen by 8.9% due to a strong Swiss franc and the introduction of the Apple Watch, which is to hit more countries next week

Bloomberg

Swiss timepiece exports had their biggest monthly drop in more than five years as the strong franc and the introduction of the Apple Watch weighed on deliveries.

Shipments slid 8.9 percent to 1.71 billion Swiss francs (US$1.9 billion) last month, the Federation of the Swiss Watch Industry said on its Web site on Thursday.

That is the steepest percentage decline since November 2009 and means exports in the first five months of the year fell 0.3 percent.

Swiss watchmakers are struggling to adjust prices worldwide as the franc has surged to record levels against the euro this year. The advent of Apple Inc’s wrist gadget is compounding the industry’s difficulties and the device is due to arrive to store shelves in more countries, including Switzerland, next week.

That may lead retailers to reduce orders of Swiss watches on concern of rising competition.

“Watch exports to the US in the lower price segments could also have had some negative impact from the launch of the Apple Watch,” Zurich-based Zuercher Kantonalbank analyst Patrik Schwendimann said by e-mail.

The US market might only grow by a low single-digit percentage this year, slowing down from 6 percent growth last year, he said.

The decline in watch shipments was 14 percent in that market and 34 percent in Hong Kong, where Chinese consumers frequently buy timepieces to take advantage of lower taxes. May also had two fewer working days than in last year.

The strong US dollar and the weak euro is leading more Asian tourists to Europe rather than the US as their spending money can go further there.

That could also explain the drop in shipments to the US, Bloomberg Intelligence analyst Deborah Aitken said.

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