Not all images were able to load for printing. Please close the print window and try again. Swiss Watch Exports Show Maintained Momentum for the Luxury Watch Industry
The situation is improving in many areas, but issues aren’t entirely solved yet.
Following a historic contraction in 2020, the luxury watch industry experienced a V-shaped rebound, with Swiss watch exports reaching record levels in 2021. For the first five months of 2022, the value of exports rose by nearly 13% with the US and Europe largely leading the growth. On the other hand, China’s luxury spending is impacted by COVID-19 restrictions in several major cities, a situation that redistributes the geographical breakdown of exports.
While several challenges remain – including the return of inflation, slowing global growth, and the Russia-Ukraine conflict – the luxury watch industry experiences sustained momentum. The value of Swiss exports rose by 12.8% to CHF 9,772 million over the first five months of the year. The growth was driven almost exclusively by high-end watches (export price > CHF 3,000) as the number of units exported increased by just 2.3%. Watches in the CHF 200-500 range are the most impacted, and remain on a sharply downward trend (-22.0%).
The trend was reflected in the financial statements of key industry players. In May, Richemont reported sales up 46% at EUR 19.2 billion for the year ending 31 March 2022. For the first quarter of 2022, the organic growth for the Watches and Jewelry Division of LVMH was 19%.
The US and Europe lead growth – China impacted by COVID restrictions
The American and European markets lead growth. For the first five months of the year, Swiss watch exports rose by 34.8% for the US (CHF 1,539 million) and by 24.7% for Europe (CHF 2,900 million). These markets saw steady demand driven by a back-to-normal attitude. They also benefited from the reduction of deliveries to China impacted by the measures to quash COVID-19 infections.
Indeed, Swiss watch exports to China (CHF 874 million; -30.2%) and Hong Kong (CHF 829.5 million; -7%) are down quite importantly. According to its latest report on the luxury industry, Bain & Company believes that the domestic spending from Chinese consumers will likely recover through the second half of the year.
Last, exports to Russia are down 55.6% as commercial activities have been suspended as a consequence of the invasion of Ukraine. Switzerland banned the export of luxury goods to Russia in March.
For more information on Swiss Watch Exports, please visit www.fhs.swiss.
