On Thursday 17 December 2020, the Federation of the Swiss Watch Industry published a press release in which it announced that the decline in watch exports in November was less marked than in October. However, Richemont and Swatch shares stood out and appear to be benefiting positively from the situation.
Still because of the health crisis, the watchmaking sector has also suffered the consequences of the latter. This year, and more specifically over the last 11 months, Switzerland has seen a 23.5% drop in exports in its favourite sector.
However in November the decline in Swiss watch exports weakened again compared to previous months, particularly October. This phenomenon is due to the very strong growth recorded in China, whose inhabitants remain within the country to consume massively on their own territory. Exports to China thus recorded an increase of 69.5%.
China is not the only country to supply an increase in growth: the United Kingdom is up 21.8%, Taiwan 18.5% and Russia 36.3%. Unfortunately this is not the case for the United States, which recorded a 2.8% drop in the sector.
The press release adds all the same that during November, international watch sales fell by 3.2% year-on-year to 1.94 billion francs. For the Cantonal Bank of Zurich, this means that watch exports are coming through with 2% better than forecast.
In these complicated times, two watchmaking houses stand out and seem to be benefiting positively from the situation. In the morning, more precisely at 9.55 am Richemont took 1.1% at 80.22 Swiss francs while Swatch took 1.2% at 235.80 Swiss francs, but in a much more borrowed SMI, it gained only 0.4%. At 11.34 am, Richemont took 1.5% at 80.54 francs and Swatch took 2.1% at 237.80 francs in a SMI that appreciated by 0.67%.
This increase is due to the fact that only watches with a value of more than 3,000 Swiss francs recorded an increase in the number of pieces compared to last year (+ 5.9%). Watches between 500 and 3,000 Swiss francs remained relatively stable at a similar level to last year (from 0% to -0.5%). It is those worth less than 200 francs which are really suffering and which are registering a significant decline in number of pieces of 27.4%.
Despite these positive results, the Zürcher Kantonalbankh believes that the strong growth brought by China is not enough and does not make up for the lack of tourism and all the consequences brought about by the pandemic. The Asian region is only positive by 0.4%, which remains rather fragile
It should also be noted that, at the end of the day on Friday, Richemont (-0.9%) and Swatch (-0.3%) also lost ground.
Featured Photo : © Swatch
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