Slump in Asian orders hits Swiss watch exports

The value of Swiss watch exports fell by 3.9 percent in May compared to the same month a year earlier as orders to Hong Kong and China fell dramatically, the Federation of the Swiss Watch Industry (FH) reported on Thursday.

Slump in Asian orders hits Swiss watch exports
Photo: Mike Chapman

At 1.8-billion francs, the monthly total remains high but the overall number of timepieces exported continued a steady decline, the FH said.

The federation said last month’s drop was largely attributable to to fewer gold watches being sold.

“Only watches between 200 and 500 francs (export price) showed a positive result in May,” FH said.

The number of Swiss wrist watches exported in the first five months of the year fell by 7.3 percent to 10.73 million compared to the same period in 2012, the federation said.

But the overall value of watch exports for the period remained positive, up 1.7 percent to 8.73 billion francs, although growth is slowing.

Exports to Hong Kong, the biggest market, fell 15.7 percent in May, while those to China, the fourth biggest market, fell by 19.4 percent.

Switzerland and China signed an accord last month that would drop Chinese tariffs on Swiss watches.

Exports to the United States, the second biggest market, remained flat, while sales to Italy (third biggest market) and Germany (fifth biggest market) continued to grow but at a slower rate, FH said.

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Swatch branches out into ‘cool shades’ market

Swatch, Switzerland’s largest watch company, is branching out into sunglasses for a second time through a deal announced on Tuesday with Italian eyewear creator Safilo.

Swatch branches out into 'cool shades' market
Photo: Swatch

The two companies announced an agreement to collaborate on Swatch branded sunglasses billed as “creative, playful and lifestyle oriented”.

The new line of “Swatch The Eyes” will be rolled out in the spring.

Under the deal, the two companies will co-design eyewear collections while Safilo will develop and manufacture the eyewear.

Biel-based Swatch said the sun specs will be distributed through its global retail network and Safilo’s US retail chain, to be followed by additional selected North American retailers.

“Recreating a success story in eyewear via the reinterpretation of the category is an exciting challenge,” Swatch president Nick Hayek said in a statement.

“Beyond timepieces, eyewear also belongs to those product categories that customers enjoy because they merge fun, style and emotion,” Nayek said.

“We are adding an iconic brand to our portfolio, complementing our presence in the vast and fast growing mass cool consumer segment with a unique proposition that leverages the smart, playful, innovative DNA of Swatch,” Safilo CEO Luisa Delgado said.

Swatch, known for its iconic plastic watches as well as its ownership of luxury timepiece brands, earlier tried a foray in the sunglass market in the 1990s that was later abandoned.

The fresh venture comes as Swatch is struggling to boost revenues in the face of the strong Swiss franc, which ate into the company’s bottom line for 2015.

The company last week reported a net profit for the year of 1.12 billion francs, down 21 percent from 2014, while sales dipped 0.9 percent to 8.45 billion francs.