Swiss Watches Exports Up 19.3% led by Growth in Asia

The entrance to the main watch hall at Baselworld, the world's largest watch and jewelry fair held in Basel, Switzerland.  Photo credit: Anthony DeMarco

The Swiss watch brand is as strong as ever and shows no sign of losing its luster.

Following the recovery of 2010, watch exports in the first half of 2011 showed a year-over-year increase of 19.3 percent to 8.7 billion Swiss francs ($10.8 billion), according to the Federation of the Swiss Watch Industry (FH). Last year’s level was surpassed by more than 1.4 billion francs ($1.7 billion), placing the sector above 2008 export levels.

All of the Swiss watch industry’s main markets recorded a positive trend in the first half of the year. Asia (24.3 percent) increased at a higher rate than Europe (13.3 percent) or America (16.6 percent). It accounted for 54.4 percent of all Swiss watch exports.

Hong Kong was by far the largest market for Swiss watches for the first six months of the year, up 23.6 percent to 1.74 billion Swiss francs ($2.16 billion). The U.S. was the second biggest market up 19.6 percent for the period to 906.3 million Swiss francs ($1.1 billion). China moved up one place in the ranking after recording a 47.8 percent increase in growth (the highest increase across the board) to 715.1 million francs ($890 million). Singapore, South Korea and Thailand also made strong showings between January and June, the FH said. The Middle East also proved very attractive for Swiss watch manufacturers. Japan continued its gradual recovery and ended the half-year on a positive note despite the earthquake in March. In Europe, the positive assessment allowed for different interpretations according to markets. France continued to be influenced by products in transit and therefore recorded growth higher than the world average. Other markets on the Old Continent showed less marked changes.

All months showed double-digit levels of growth for the period. April and May exports rose by more than 30 percent. However, the FH warned that the strong Swiss franc is having a serious impact on margins for watch companies, forcing many to raise prices. However, even with this concern the industry forecasts sustained growth for the second half of the year.

Wristwatches made up the lion’s share of clock and watch industry exports. Their value amounted to 8.1 billion francs ($10 billion) in the first half-year, an increase of 19.6 percent compared to January-June 2010. This growth was supported by a high volume of timepieces. During the first six months of the year, Swiss manufacturers exported 14 million watches, an increase of 2.6 million units (22.5 percent) compared to the same period in 2010.

Gold watches played an important role in terms of growth by value, while in volume terms, steel and the category of other materials did most to underpin the general increase.

All price segments recorded double-digit growth, both in value and volume terms. The 200-500 franc category (export price) registered an increase of more than 30 percent, according to industry figures. Watches costing less than 200 francs accounted for more than 70 percent of exports in volume terms. Timepieces costing more than 3,000 francs showed a flat progression at a high level.

Other watchmaking products exported by Switzerland also recorded increases. Their overall value rose to 561.4 million francs (15.9 percent). Exports of movements saw their value increase by 9.9 percent, while alarm clocks and other clocks lost ground (-46.4 percent).

Timepiece Tuesday II: Swiss Watch Sales, Bulgari Exhibition in Singapore

 Swiss Organization Predicts Record Watch Sales
Switzerland’s watch exports may rise to a record in 2011 as demand for luxury timepieces continue to recover, said Jean-Daniel Pasche, head of the Federation of the Swiss Watch Industry. Shipments this year may break the record of 17 billion francs ($17.7 billion) of exports set in 2008, Pasche said in an interview today on the final day of the Geneva watch fair. Exports in 2010 were "a bit" higher than the 16 billion Swiss francs of watches and components the industry shipped to other countries in 2007, Pasche said. The trade group will publish exact figures for 2010 in early February, Pasche said. Exports in the first 11 months of the year rose 22 percent to 14.6 billion francs, the group said last month. Read more.

Bulgari Watch Exhibition
Bulgari is hosting an exhibition featuring the first collection of timepieces created after Bulgari integrated the luxury Swiss watchmaking companies, Gerald Genta and Daniel Roth, under its own brand last year. "Bulgari: A New Face In Time," will open Wednesday at the Luxe Art Museum in Singapore. While the exhibition will still boast plenty of sparkle, courtesy of a selection of haute jewelry and vintage watches dating as early as 1945, the focus will be on the new Bulgari Gerald Genta and Daniel Roth collections, unveiled at last year's BaselWorld international watch fair . Read more  (Pictured, Daniel Roth Collection: Grande Lune and Papillon Chronograph)


Christie’s Watch Business Booming in Dubai 
Dubai is poised to become a target market for rare, luxury watches with sales in the emirate rising 42 percent since 2008, London-based auction house Christie’s told a Dubai-based publication. Two auctions of rare timepieces in the emirate last year generated sales of $2.5 million, Christie’s said, a rise of 19.5 percent on the revenue generated the previous year from rare watch sales. The revenue represents a rise of more than 42 percent since 2008, Aurel Bacs, international head of Christie’s Watches told the publication, Arabian Business. “The growth in watch sales since 2008 in Dubai has been beyond our expectations.” he said. “With this level of growth we expect Dubai to become an increasingly significant auction centre for our global watch sales.” The priciest piece sold in Dubai last year was a Patek Philippe piece with moon phase display (pictured), which sold for $116,500.

$1 Billion Increase in 2012 Swatch Group Sales

Swatch Group, the world’s leading supplier of finished watches and watch movements, said Thursday that annual gross sales for 2012 increased by $1 billion, year-over-year. Its 2012 gross sales totaled 8.143 billion Swiss francs ($8.88 billion), a 14 percent increase over 2011 gross sales.

The Swiss company said in a statement that its 2012 watch and jewelry gross sales increased 15.6 percent year-over-year, to nearly 7.3 billion Swiss francs ($7.96 billion), led by sales in China, with double-digit increases for all of its brands.

In the production segment of the company, capacity was expanded, resulting in improved performance. This led to a 10.1 percent increase in gross sales to 2.21 billion Swiss francs ($2.41 billion). Bottlenecks, which had been a problem in past years due to robust demand, were reduced in 2012, the company said.

Its electronics systems segment “is still exposed to a combination of strong price pressure and adverse exchange rates,” the company said. As a result, gross sales decreased by 7.4 percent in 2012 to 311 million Swiss francs ($339,373).

The Swatch Group brand, Omega, is the official timekeeper for the Olympics, which meant that the company had major marketing expenses during the 2012 London Summer Olympics. This along with “unsatisfactory currency developments” will hit projected operating profit and net income. However, the company said it still expects “good results.”

The company also said that the first 10 days of January saw strong sales, indicating “healthy growth” for 2013.

Based in Biel—the vertically integrated company with full manufacturing capabilities, branded retail outlets and alliances with other retailers throughout the world—owns and operates the following brands: Breguet, Blancpain, Glashütte Original, Jaquet Droz, Léon Hatot, Omega, Longines, Rado, Union Glashütte, Tissot, Calvin Klein Watches + Jewelry, Balmain, Certina, Mido, Hamilton, Swatch, Flik Flak, Endura and Tourbillon.

Please join me on the Jewelry News Network Facebook Page, on Twitter @JewelryNewsNet and on the Forbes Web site.