Swiss watches climbed in July – pricier timepieces lead the way
Swiss watch exports climbed for the fourth month out of five in July, as higher-end watches proved popular with consumers. While lower price models struggled, expensive watches saw an uptick in sales. The Federation of the Swiss Watch Industry said that watches which wholesale at more than 3,000 francs rose by 5.9% - meanwhile, timepieces retailing for less than 200 francs fell by 18%. This is great news for luxury giant Richemont, which only has one lower-price brand amongst many high-end ones.
Richemont’s share price has risen by 55% over the past 12 months!
That it is cheaper watches, made by companies like Swatch, some of whose brands have an entry point of around $50, is informative. While The Federation of the Swiss Watch Industry did not offer any illumination on the matter, it is interesting to note that the lower end of the luxury timepiece market has become flooded with ‘smart’ alternatives. Apple Watch is an obvious example, but even smartphones can tell the time. Likely, the $50,000 watches that many of Richemont’s brands sell will be harder to displace.
According to The Federation, the overall picture is a good one, and one which has arrived ahead of time. In a press release, it said: “Although Swiss watch industry exports are not equally dynamic everywhere their overall trend has stabilized… this stabilization had not been expected before the end of the year.”
China has been the main driver of sales over the first half of 2017. By the end of July, watch sales to the country had risen 21.8%. Hong Kong rose by 16.8%, and Singapore rose by 3.8%. However, other key markets (the U.S., Japan, Italy, Germany, France, and the UAE) all logged a decline in sales.
Dominion holds Richemont in its Global Trends Luxury Fund.
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