Swiss Watch Exports Slow in July as China Sales Fall
PARIS — Swiss watch exports sputtered in July after logging strong sales growth in the first half of the year.
Exports were down in both value, slipping just under 1 percent year-over-year to 2.1 billion Swiss francs, or $2.5 billion, and volume, down 3 percent. The July slowdown follows overall growth of 14 percent recorded in June.
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The drop was notable considering the softening luxury market worldwide, Barclay’s analyst Carole Madjo said in a research note.
“Considering that this is the first time [Swiss watch exports] turn negative this year, the release could provide additional caution around the sector and notably hard luxury,” she wrote.
Bernstein analyst Luca Solca noted that the slowdown comes after nearly 30 consecutive months of growth following a post-pandemic surge in demand.
China showed a significant drop, with sales down 16.6 percent in July. It’s a notable contrast to June’s numbers, when sales in China were up 9 percent. The July numbers also marked the first time China had posted a decline since pandemic-era restrictions were lifted in January 2023.
China remained was the second largest market for Swiss exports, holding 11.9 percent market share in July.
July sales in Hong Kong were up 6.3 percent, though that number was a steep deceleration from the 46.2 percent sales growth posted in June.
Sales were up 5.2 percent in the U.S. on a value basis, a slight softening from the 8.8 percent growth last month, while North America showed a 20 percent slowdown in volume. The U.S. remains the largest export market, with a 15.5 percent share.
However, analysts framed the U.S. sales numbers in a positive light. “We view this as a positive given the weakening macro environment,” Barclay’s Madjo noted.
Outside of China and Hong Kong, the rest of Asia was down 6.4 percent, with South Korea falling 24.1 percent. Singapore was also down 7.1 percent, while Japan was a bright spot, up 5.5 percent.
Europe remained resilient overall, up 2.2 percent, with variations across the region. Spain was up 23.9 percent, the U.K. 5.6 percent and Germany 5.1 percent. France was down 14 percent.
“Chinese luxury spending has started to reverse-repatriate outside of mainland China to Hong Kong, Macau and Europe,” noted Bernstein’s Solca. The lower South Korean numbers were also partially attributed to travel, “as South Koreans are now traveling and spending in Europe and Japan,” he added.
Value of sales on steel watches fell 6.1 percent, while precious metals remained stable. Bimetallic gold and steel watches grew 4.8 percent, while growth was strongest in the other metals category at 10.2 percent. In volume terms, all categories fell except the other metals, which were up 21.9 percent.
The 500- to 3,000-franc price category fell significantly, down 12 percent. This segment represents around one-fifth of all Swiss watch exports. Most other price segments saw minor variations.
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