The news for the watch industry is bad. “The headwinds are very strong — especially for watches,” warns Richard Lepeu, chief executive of Richemont, the Swiss luxury goods group whose brands include Cartier and Montblanc. The group’s sales in April 2016 were 15 per cent lower than the year before, in constant currencies.
Statistics on foreign sales of Swiss watches show trouble across the industry: in the first quarter of 2016, exports were 8.9 per cent lower than in the previous year, according to the Federation of the Swiss Watch Industry. The trouble has been blamed on a range of factors, from China’s economic slowdown to a strong Swiss franc.
The industry’s hope is that this year will bring an improvement, particularly in the US. “The global environment is tough mainly because of the significance of Hong Kong as a market. There is an overhang of inventories, but I think the more affordable watches are already selling better,” says Scilla Huang Sun, a luxury sector specialist at GAM Investment Management in Zurich.