Swiss watch exports showed no signs of the predicted decline in the past month, and the increase in exports underlined that the luxury sector is resilient during the present global economic slowdown.
The Swiss Customs Office reported that exports of watches actually rose 13.2% in October to $2.25 billion. Experts were predicting a fall as sales in September had dipped 2.7%, the first fall to occur since December three years ago.
Luxury goods have been defying the global markets and have been experiencing sales levels that some are calling “spectacular”. The luxury market is still hot while all other markets are cooling down dramatically.
Fuelling the luxury goods market are Asian tourists visiting Europe and making their high-end purchases in top boutiques while holidaying. Chinese shoppers in particular were responsible for stunning increases as they picked up designer watches and handbags.
Things dropped temporarily in China as the leadership change in the country was taking place and there was more scrutiny over how people spent money on lavish items. A decline for October was further expected due to the destocking effect.
“Demand in China and Hong Kong has been much weaker, and the watch exports to these markets has been weak in recent months as the retailers sell off their inventories,” said Patrik Schwendimann, Zuercher Kantonalbank analyst.
Analysts claim that sales and growth rates in the coming year will remain at their long-term average of 5%.
Thomas Chavet, an analyst with Citi said: “European demand for high-end watches is still booming due to tourists, while the U.S. market is catching up in our view.”
Patrick Hasenboehler from Bank Sarasin stated that timepiece fans who buy watches in the high-end category probably haven’t been affected by the slowdown in the global economy.
“If you want to show your wealth as a man, a watch is the only way to do it,” he said. “And when you buy an expensive watch, it has to be Swiss,” he said.
Story source: 4Traders
Photo source: Blancpain