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Switzerland: Richemont and Swatch down after watch exports

 

 

 

 

 

 

 

 

 

 

 

 

 

Switzerland: Richemont and Swatch down after watch exports

Swatch and Richemont shares were down on Thursday morning on the Swiss Stock Exchange, following the publication of watch exports for the month of August by the Federal Customs Administration (AFD).

 

Swiss watch exports continued their decline in August, but at a slower pace than in previous months. They totalled 1.3 billion francs, down 11.9% year-on-year, attributable to the coronavirus pandemic.

 

The mainland Chinese market was an exception, with very strong growth for the third consecutive month, thus supporting this result.

 

But the surge in watch exports to China is not enough to offset the decline of Richemont and Swatch on the Zurich stock exchange.

 

At 10.30 a.m. on 17 September, after AFD announced exports, Swatch lost 0.4% to CHF 216.10 and Richemont 1.3% to CHF 65.02 in the SMI index – the Swiss Market Index, which includes the 20 main stocks on the Swiss stock exchange – which fell by 0.63%.

 

Bernstein’s analysts note that the positive development in the Middle Kingdom should particularly benefit the Swatch Group, which has the greatest exposure to this country in the luxury goods sector.

 

However, the development of smartwatches will continue to have a negative impact on entry-level watches, whose volumes have been falling for months, independently of the Covid-19.

 

Credit Suisse’s specialists have raised their 2020 forecast for the Biel-based group somewhat, particularly in terms of operating profit, as demand has improved somewhat.

 

China accounts for the lion’s share of Swiss watch exports

 

From January to August, the development of the main markets was negative with the exception of mainland China, which recorded very strong growth of +44.9%.

 

This performance is explained by the gradual repatriation of watch purchases made in Switzerland until before the health crisis.

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In second place, the United States (-4.0%) declined, as did Hong Kong (-16.4%). Due to the absence of tourists, particularly Chinese tourists, shipments to other European countries fell by 20.5% and by 24.5% in Japan.

 

It should be noted that from January to August, shipments abroad by the watch industry totalled 9.8 billion francs, down by 30.5%, according to the Federation of the Watch Industry (FH).

 

 

Read also > SWISS WATCH INDUSTRY FACING WORST EVER CRISIS, ACCORDING TO CEO OF HUBLOT

 

 

Featured Photo : © Baume F

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