Swiss watch exports experienced a minor decline in July, marking the first decrease in over two years. This comes as the demand for luxury watches starts to wane due to rising prices and economic challenges.
The Federation of the Swiss Watch Industry reported a 0.9% drop in shipments, amounting to 2.2 billion Swiss francs ($2.5 billion) in July.
China, a major market, was a significant contributor to this decline with a 16.6% drop, following a notable surge the previous year.
Exports to Singapore, another pivotal market, also decreased by 7.9%.
This dip hints at a potential slowdown in the demand for high-end Swiss watches, which had previously reached a record high of over 24 billion francs in 2022.
Notable brands like Omega, Patek Philippe, and Rolex have increased their prices to counteract rising production costs, which had previously amplified sales and profits.
Analyst Patrik Schwendimann from Zuercher Kantonalbank expressed surprise at the decline and anticipates it might affect the stock values of companies like Richemont and Swatch Group AG. However, he also emphasized that one month’s data shouldn’t be overly emphasized and expects a rebound in the coming months.
The last recorded monthly decline was in January 2021.
Despite the recent dip, the federation remains optimistic, suggesting that the industry is on track to set a new record in 2023.
Interestingly, watches priced over 3,000 francs saw a 2.2% increase in value.
The US, which became the largest market for Swiss watches in 2021, saw a 5.2% growth in shipments in July.
Reported by Bloomberg with contributions from Allegra Catelli and Alessandro Speciale.
