UPDATE: Japan Leads As Swiss Watch Exports Surge 37% In April
26 May 2011 - 7:30PM
Dow Jones News
Recovering demand in Japan led the 37% surge in exports of Swiss
watches during April, according to data released Thursday.
The annual increase in sales to CHF1.57 billion ($1.8 billion)
was an acceleration from March, when sales increased 11.2% in real
terms. In nominal terms the gain was 32.1%, according to data
released by the Swiss customs office.
The figures show how the watch industry has overcome fears of a
decline in sales in Japan following the tsunami and earthquake in
March.
Against all expectations, sales exports to Japan rose 44%, the
Federation of the Swiss Watch Industry FH, said.
Earlier this month, Compagnie Fianciere Richemont (CFR.VX),
which sells watches under brands such as IWC and Piaget, said its
sales into the country had risen by 3% in April.
"Japan was really strong, much better than expected," said
Patrik Schwendimann, analyst at Zuercher Kantonalbank.
Before the earthquake, Japan was recovering after several years
with a difficult environment, he said.
"There was an initial drop after the earthquake, but it now
seems like it was a non-event for the luxury industry,"
Schwendimann added.
The boom in Japan will have helped Richemont in particular,
which has around 11% of its sales in the country.
The Asian markets of Hong Kong, China, and Singapore maintained
their rapid growth, with all seeing watch imports rise by more than
40% in April, the Swiss watch federation said.
The U.S. market, the world's second largest after Hong Kong,
increased by 48.6% while Middle Eastern markets also reported
strong increases.
The United Arab Emirates reported watch imports up 54.6% and
Saudi Arabia up 50.1%.
Earlier this week, Swatch Group (UHR.VX) said it was buying a
33% stake in Alzouman General Trading Co, a Saudi Arabian-based
firm which distributes the watch company's Swatch and Flik Flak
brands.
Jon Cox, analyst at Kepler Capital Markets, said the sales
growth came despite the continued problems with the strong Swiss
franc.
"These were very strong results," he said. "In local currencies,
the exports would be around 10% higher."
Exports of watches at all price points increased, although
higher-end pieces led the growth, with all segments above CHF200
reporting increases higher than 30%.
Watches which sell for less than CHF200 increased exports by 20%
by volume and value, the Swiss watch federation said.
ZKB's Schwendimann said it was normal for the high-end watches
to lead the growth because of less competition in that segment, and
higher sales in emerging markets.
"It seems to be the higher end which is doing well, which would
support Richemont. But Swatch also has higher end brands like
Breguet and Omega which are doing well," he said.
Analysts are now revising their estimates for full year
sales.
"I was expecting a 10% rise this year, but that's looking a bit
low now, and I will revisit the data," said Jon Cox, analyst at
Kepler Capital Markets.
Patrick Hasenboehler, at Bank Sarasin, said he had previously
expected exports to rise around 10% in 2011, but now expected a
rise of around 15%. He expects Swiss watch exports to exceed CHF18
billion in 2011, overtaking the previous record of CHF17 billion in
2008.
"There is still enormous demand for Swiss watches, particularly
in emerging markets where people want the high-end watches," he
said.
At 0808 GMT, Swatch shares were down 0.3% at CHF419.50 and
Richemont was off 0.3% at CHF53.25 on the Swiss Market Index, which
was trading up 0.2%.
-By John Revill, Dow Jones Newswires; +41 43 443 8042 ;
john.revill@dowjones.com
Swatch (PK) (USOTC:SWGAY)
Historical Stock Chart
From Jun 2024 to Jul 2024
Swatch (PK) (USOTC:SWGAY)
Historical Stock Chart
From Jul 2023 to Jul 2024